http://www.videolan.org/doc/faq/en/index.html#id420604
The legality of libdvdcss is disputed, but I know for my part that in Germany it's not illegal to use that library, as the law states that it is only illegal to workaround "effective" copy protections or sth like that and in one court case it has been found that CSS is not a protection that can be called "effective" as it has been hacked years ago. But it depends on your jurisdiction, contact a lawyer if you want to be totally sure. But of course you could use that technique again to do sth illegal, e.g. create copys of a DVD and sell them.
The mere playing of MP3s you legally own is not at all illegal in any country I believe. The only disputable actions would be ripping mp3s from CDs or playing pirated MP3s. But that again is viewed differently from country to country.
Just ask a lawyer.