Bought a new monitor Samsung 2253LW 21.6" Widescreen LCD Monitor. I bought it because it had great reviews for picture quality but dvd's look pretty grainy. Right now I have a radeon 8500 4x agp. Will updating my card improve picture dvd quality?
Regular DVD will pretty much always look terrible on an LCD monitor. The reason for this is that a standard definition DVD has a resolution of 720x480 and all LCD have a resolution of at least 1024x768, and in the case of your 21.6" monitor, the native resolution is even higher. As a result, when you watch the DVD in full screen the image is stretched to fit and you are likely seeing each pixel of the video represented by 2 or more physical pixels on the screen. That is why the pictures look grainy.
Unfortunately the only ways to get rid of the graininess are to get a higher resolution source (Bluray), get a smaller monitor, or get a CRT for your movie watching. My suggestion however would be to just sit a couple of feet further away from the monitor and you won't be able to tell the difference.