Your 7600 GT will offer alot of improved DVD quality playback features, but you have to enable them first.
IN the new Nvidia driver panel, you have to go to TV/Video color settings, then make sure you're in the advanced view. THEN you have to go to the 'enhancements' tab.
From there you can turn on noise reduction, INverse Telecine (pulldown detection), and detail enhancement.
You also have to make sure 'hardware acceleration' is enabled in your DVD playing software. It should be in the software options of programs like Cyberlink PowerDVD or Nero Showtime.
With all these options on, a 7600 GT will deliver great DVD quality, about the same as a 7900 GTX or X1950 XTX.