Im guessing you have lots of background apps or you video card settings is set to more than it can go - maybe it has same resolution but set to 16 bit. run directx setup to verify your computer can take video at that level.
Thanks guys I found out what it was. It was Netmeeting running in the background. When I go to the guest account Netmeeting isn't set to run. When I shut down netmeeting on the admistrator account WinDVD plays fine. Thanks for the help.