Since the patents on MPEG (as used in DVD's) seem to have expired, maybe VLC could create a "sibling project" to libdvdcss but first acquire a "real license" from the dvdcss people (I think it's only like $15K/year). Make it a service that other things (ex: libdvdnav) can call into to avoid licensing problems. Voila a legit "free" DVD player for the world. I would donate a bit toward it anyway.
Cheers anyway
-roger-