DVD Playback is complex and requires the cooperation of a number of separate pieces of software to work all in concert, so it can be troublesome.
My guess would be that it is
very likely that the cause of your problem is related to the fact that you have a number of competing pieces of DVD playback software on your HTPC that isn't working. Nero's DVD App (used to be called ShowTime, is it still?) will use it's own CODECs properly, but might not let other apps use it's CODECs correctly. This can also be true of PowerDVD and WinDVD among others. Generally, these apps all "fight" over control of your DirectShow MPEG-2 decoding duties and whichever was installed last "wins".
You may want to read my investigations in this thread:
http://yabb.jriver.com/interact/index.php?topic=35781.0You can use an application like
Rad Light Filter Manager (there are other options too) to selectively raise and lower the priorities of your different playback filters to find a combination that works.
I have tested extensively in that thread (as you can see) and CCCP's filters do provide everything you need, though it can be made to work with other filters as well. You'll need to play with it a bit I would guess to get it all sorted if you have a bunch of playback software all jumbled up on the machine (and you might want to just clear some of it off).
MC12 (still in Beta) does have some built-in DirectShow filter selection capabilities. If you're willing to deal with a beta program you could try that and play with it from within MC (rather than externally through Rad Light). You will have to deal with some feature and program instability though as it is a beta program and still fairly early in the process.