Well, many decoder cards require a passthrough from the vidcard (actually, I haven't heard of any that don't)... this usually means some degradation in image quality just because of the passthrough. Even though software decoders are "slower", a computer with enough horsepower (400MHz P2 equiv?) should be able to run a DVD at full quality in software just fine. I personally don't think its worth it, especially with the price of CPUs versus the price of a decoder card.
Also, some people have complained that the passthrough causes blurriness on the desktop in higher rez. So if you gots a big monitor with hi-rez... I recommend staying away from decoder card.