Better quality than hardware decoders in "monitor" view
Saves you a PCI slot
Modern 450Mhz+ CPUs are more than enough for software decoding (usually only 20-30% of utilization is needed when playing DVDs)
DVD Region settings easily changed
Software decoders and players are easily updated/improved, whereas hardware decoders may require complicated BIOS/firmware updates.
Disadvantages of using software decoders :
Hardware decoders saves your CPU for other uses
Allow external TV output (both composite and s-video)
Hardware decoders - no dependencies on graphics card hardware overlay layers
WHAT DO YOU NEED?
A software decoder is a cheap way to play DVDs on your PC, utilizing your CPU, sound card and graphics card, while saving you a PCI slot. But what should one looks for when choosing a software DVD player ?
Video - Acceleration Support - Some software solutions, combined with a DVD accelerated graphics card, can speed up the decoding process by giving the host graphics processor some of the work to do. Two common forms of acceleration exists in Motion Compensation (MC) and Inverse Discrete Cosine Transformation (iDCT).
Video - Decoding Quality - Decoding quality between different software decoders can be dramatic. A good quality picture should look like a 24BIT JPEG when it is paused. Bad quality can result in a grainy picture or dithering, where a "lack of colors" effect is observed. Blurry pictures are also signs of a bad decoder.
Video - Decoding Speed - Decoding speed is dependent on how efficient the decoder is. While some decoders like the Cinemaster soft-decoder can work relatively well in a Celeron 300 enviroment, some decoders like the Cyberlink PowerDVD 1.6 will require a PII-450+ processor. While the Cinemaster soft-decoder will still produce a relatively good quality picture, some "faster" decoders skip certain steps in the decoding process and can result in a poorer quality picture. Examples of such "fast" decoders : Zoran Soft-DVD, and the Cyberlink PowerDVD 2.0.
Video - Sub-picure Alpha Blending Support - If you've ever seen DVD in action, you'll know that many have great looking title menus, where you can select audio preferences and the like. You'll also have noticed that certain high-lighting effects are present and that some sub-titles look better than others on different machines. On software solutions, the Sub-picture Alpha Blending controls these functions. While many graphics cards support hardware sub-picture alpha blending, most software decoders currently do not support acceleration for this feature. Instead, they rely on their own software-emulated blending, and this produces some quite different effects. The best support seems to come from Intervideo's WinDVD while the poorest comes from Cyberlink's PowerDVD.