I thought I'd post my solution, since my problem was slightly different. This happened mere hours after everthing was playing fine. I was even watching a DVD fine. I then encoded something with nero vision (yeah i know it sucks), and when I came back, bam, I get that damned error. Interesting I could change my resolution to any other rez and my video would appear and the DVD would play normal! Even a higher resolution! Also, change the color to 16 bits worked... but that wasn't good enough for me. All the solutions I got by googling it didn't work:
Nothing wrong with 3D acceleration
Nothing wrong with DX9
No Netmeeting software even on my computer
And like I said, the problem popped up in a matter of hours, for no reason. So I FIXED this problem by right clicking the desktop -> properties -> Settings: I rightclicked the second monitor in the top part (I have multiple monitors by ATI on my laptop) and clicked 'attach' or 'attached' and bam, screen blinked and my DVD's play again!
I have NO IDEA why or how this worked, just that before I did this, the second monitor wouldn't accept any setting I tried to change on it, from Color quality to resolution, and I knew it used to even if I didn't have a TV attached at the time. Well I hope that wasn't to long, but I pride myself in being complete
Good luck everyone
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