I experimented a little and greatly improved DVD playback quality. I use the latest Media Player Classic, nVidia PureVideo mpeg2 decoder, and ffdshow for postprocessing (Blur&Noise reduction, upscale resize, with luminance and chroma sharpen, YV12 output). I had to tweak the settings a bit differently than suggested on the net, because my computer couldn't handle the load (but it came very close, very few frames dropped).

The improvement is huge! Your 'low quality' sample looks great. I can only imagine what the full quality video will look like