I watch DVD's a lot, both on the PC and on TV... I've used plenty of stand alone DVD players and I've watched DVD's on PC's with WinDVD 2000 and Power DVD 3.0 and ATI's DVD software and I even had the DXr3 card and I've hooked up the PC to TV in all the ways possible... and I've come to the conclusion that there's no real RIGHT answer to your question. Everyone's got their own preference. When I got my first DVD player it was in a laptop and that's when I bought my first DVD and watched my first DVD movie all the way through and I though it was great. Then I graduated to watching DVD's on a 19" monitor and I was blown away again! It's cool watching a DVD movie on a nice LCD, but it does present better on a bigger screen. For that same reason I enjoyed watching movies more on my parent's 27" Sony TV with my PC hooked up to it with s-video out on the video card. When I tried it with a DXr3 card it looked even sharper and better! However watching DVD's on a computer screen with the DXr3 card and PC-DVD (Creative Lab's DVD software) just sucks... real pixely and I can't figure out why. Maybe it was just my card... my uncle's DXr2 card didn't have the same problem for him...
Anyway, like I said I've seen it all and though I think watching a DVD on the PC with a nice big monitor with Power DVD and 5.1 speakers is approaching HDTV-like performance, I personally like watching DVD movies on a much larger TV screen... animated movies present better on TV's too. One thing I've noticed is that my anime DVD's look almost like mpeg1 videos on the computer screen, but on a TV set it looks normal, like it should look. Crap... I'm falling asleep...
I apologize for any typos.
-poch