Your system blows mine away and mine plays DVD's just fine with my computer.
Aside from the fact that I added a Lite-On DVD-Rom for $35 bucks I didn't need to add anything else.
Are you intending to hook up a TV to the computer or are you going to watch them on your monitor? Standalone DVD players can be acquired very cheaply right now. I got a Progessive Scan Panasonic (s-35 I think) for ~ $100 here in the States. I'm not sure how much they go for in Aussie land but surely they can't be that expensive - you guys are a lot closer to China than we are!