Now I have tried the same experiment using windvd on a w2k machine. The video gets decoded now.
This changes my question slightly:
Why can windvd play a DVD movie through USB 2.0, but the open source programs (I've tried ogle, vlc and mplayer) can't.
The output from the open source DVD players indicates that they start reading the DVD disc ok, but the reading blocks or stalls indefinitely before actual playback starts. However as stated in my first post, the same programs can play the movies without problems using the internal DVD rom drive.
Please, can anyone explain this to me or provide good links that may provide an explanation.