MPlayer can play individual VOB files. VLC can play dvd's but doesn't have full implementation yet for everything such as menus.
Both MPlayer & VLC will play avi's, mpeg 1, 2 & 4, divx, xvid, mov, etc. And both programs are open source free programs. Support open source projects!

For VLC follow the instructions for supporting such a program on win 98. MPlayer I'm not sure, you may need to download an earlier version & there's links for that. But try out the latest 1st.