To answer my own question, yes you can play DVD movies on a pci-based 486 using a Creative DXR2. My 486(s) have the UMC 8881/8886 chipset. I used a Cyrix 5x86-120 during this test.
I tested the card in Windows 98SE and Windows NT4.0 with a SCSI DVD-ROM and an IDE DVD-ROM. The SCSI DVD-ROM was SCSI2 and the IDE DVD-ROM was in PIO-4 mode using the onboard IDE connector (M919 motherboard).
In Windows 98SE, the resource meter showed about 44% cpu usage when playing a DVD with the IDE drive, whereas 20% with the SCSI drive. In Windows NT4.0, I only tested the SCSI drive and task manager did not show any cpu usage above that of an idle task manager. I had no issues with sound. My default resolution is at 1024x768, however I also tested DVD playback at 1280x1024 which also worked, but was not as clear. At 1280x1024, the VGA pass-thru isn't as crisp even when browsing around Windows, but not so bad that it would be noticed if using a CRT monitor.
From the incredibly low CPU usage, I wonder how slow a 486 CPU DVD playback will work with? I wonder why Creative set the system requirements to a Pentium 100; the pentium instruction set doesn't appear to be used in the Creative DVD Player's software.
At 1024x768, the DVD playback quality is quite good. If I playback at full screen, and sit back about a meter, I don't think I could tell the difference between that and software based playback on a P4+.
Unfortunately, PCI real-estate on a 486 is expensive. I don't think I can give up my 10/100 PCI network card for a DVD-decoder card, nor my PCI graphics and SCSI cards. The 10/100 ISA card just doesn't seem to cut it compared to PCI. Oh well -- it only cost me $7 to answer a question I've been wondering about for years. And you all get the answer for free!