you need libdvdcss

due to legal/license issues, ubuntu doesn't come with support for encrypted DVD, but you can enable it by,

$wget -c -P /tmp/ http://www.debian-multimedia.org/pool/main/w/w32codecs/w32codecs_20071007-0.1_i386.deb

$wget -c -P /tmp/ http://www.debian-multimedia.org/pool/main/libd/libdvdcss/libdvdcss2_1.2.9-0.0_i386.deb

$sudo dpkg -i /tmp/w32codecs_20071007-0.1_i386.deb /tmp/libdvdcss2_1.2.9-0.0_i386.deb

after that, install Totem-xine:

$sudo apt-get install totem-xine

you should be able to use totem-xine to play DVDs now.

any other issues, try to use this excellent how-to,
http://www.funnestra.org/ubuntu/hardy/

if you want something that works out of box, try to install mint(ubuntu based) or pclinuxos(mandriva based).