Are you sure we're talking on Windows XP? This is supposed to be a Vista error. Much better DRM in Vista. That's - partly - why Microsoft pushes it like it does.
Read about this message in http://www.google.nl/search?hl=nl&q=%22there+is+a+problem+with+digital+copy+protection+between+your+DVD+drive%22&meta=
Are you definitely sure that you can't read now the SAME DVD's that you could read half a year ago with the SAME version of WMP on the SAME OS and the SAME video card, and that you installed no 'security patches' from Windows update in the meantime?
Interesting stuff to read: http://www.cs.auckland.ac.nz/~pgut001/pubs/vista_cost.html
I'm rather sure the message would disappear if you did a system restore back to about six months ago. I really don't think this is a hardware issue.
Kees
i had a sony cd/dvd RW drive installed about six months ago, and recently it stopped reading dvds. it displays this message: "Windows Media Player cannot play this DVD because there is a problem with digital copy protection between your DVD drive, decoder, and video card. Try installing an updated driver for your video card."
i uninstalled my drivers, and installed the latest ones from the nvidia site, but that didn't work. any ideas?

Chowhound
Comic Vine
GameFAQs
GameSpot
Giant Bomb
TechRepublic