Hi everyone, I was able to run a software DVD decoder application on a Windows 98 virtual machine (VMWare Player), which is CyberLink PowerDVD. It successfully works, but with a few notes:

• It only runs on the following resolutions (640x480, 800x600 and 1024x768). Running it on resolutions higher than 1024x768 will give you this error message (The current display mode is not supported.)
• Despite VMWare Workstation doesn't have 3D acceleration support for Windows 95/98, it was able to play DVDs discs and .VOB files. Versions of PowerDVD before PoweDVD 7 relied on DirectDraw, if no DVD accelerator is detected.
• The video playback quality on VMWare SVGA II looks blocky when you fullscreen it. (at least on operating systems that are from Windows 9x until Windows XP?)
• I wasn't able to test full-length DVD movies, nor surround sound yet.

By the way, the video that was shown in that screenshot is the music video of "Scar Tissue" by Red Hot Chilli Peppers.