A "decoder" is simply a piece of software that can do two things: decrypt the CSS encryption scheme used in DVDs and play back MPEG-2 video. In other words, DVD playback software.
Because both CSS and MPEG-2 are both tightly controlled, a DVD "decoder" will usually cost you money. Windows Media Player does NOT contain a decoder (it plays back DVDs through the use of whatever 3rd party decoder you have installed). WinDVD and Power DVD are the two most common ones. This is usually not a problem for people because manufacturers include copies of DVD playback software with their drive--and even OEM drives sold in bulk often get them bundled (in fact, because I've bought so many drives, I have way more copies of this stuff than I'll ever need) (though that sometimes depends on whether or not the retailer is so generous). Did you get a copy with your drive? If so, did you install it?
I hear that Video LAN (google it up) can play back DVD videos (it's freeware, and as you may imagine, it's also under legal pressure, at least, that's what I heard). I've never used it so I don't know how well it works, but you could give it a try if you're desperately seeking a free solution.