I'd say try unregistering that filter. It's obviously not working. To do this, you'll first need to find out where the filter is, which it sounds like you've already done.
So, to unregister it, go to Start --> Run and type in the box exactly this (but replace the path to the file with the correct one):
regsvr32.exe /U "c:\path\to\the\stupid\filter\ewadueff.dll"
You should get a confirmation saying “DllUnRegisterServer in c:\path\to\the\stupid\filter\ewadueff.dll succeeded.” If it says failed or anything else, let us know. Then, for good measure, I'd also rename that file. Find it, right-click on it and choose Rename. Change the file extension to .bak or something like that (something other than DLL).
Then, give playing some files another shot.
I think the "evil" software you installed was that Video DVD Maker application.