Read this if you haven't yet, but purevideo costs money to have dvd's hardware acclerated, and avivo is free with a ati card. I tried purevideo's 30 day trial on my 7800gt and 42 inch westinghouse 1080p, its looks amazing. But don't want to pay for it, after spending this much on a video card.
There are several software players that this artical talks about but none of them make it easy to turn on hardware deinterlacing.
Purevideo beat avivo by a hair. Avivo uses less cpu power, cutting a little heat if you use it in a very small place. Proably not enough to worry about.
Avivo works with x1k series, not with a x800 tv tuner card, which would be nice for a home theater box. Purevideo works with 7000 series cards.
I can't wait to see part 2, not sure what will happen with HD video.
Are you trying to upconvert the DVD to a higher resolution?
If not, then a GF7300 or X1300 will be fine for the job, heck even a GF6200 or X300 would likely be more than up to the task.
But if you are upconverting or playing HD media, then you'll want to start at at least a GF7600GT (in which case the cheap GF7800GS on NewEgg makes more sense) or the ATI X1650Pro or higher. Those will have the grunt to upscale images or play back the latest HD material.