Someone on the FS forum was selling the 450 and 500's for cheaper than that.
Not sure if it was a K6-2 or K6-3, but might be a cheaper upgrade path.
A friend of mine is currently running his DVD player on
an AMD K6-2 350, and it's working fine (it was my old system except for the video card).
He has the ATI Rage 128 chipset, which has some decent DVD features.
He's a film buff, and he's been using it to watch DVD's all the time.
I saw Fight Club on that thing, and I didn't notice any glaring problems.
I ran a DVD player on a celery 450 (the infamous 300a), and didn't have any problems either. My G200 video card didn't have any DVD features (since Matrox couldn't get it to work with my SCSI DVD drive).
You could get a decent Duron that can oc to 900 for that price, so if you can live with it, just save it for the future upgrade.
what software are you using?