sounds good. that is strange. i have never used dvd2xbox, either. i sold my xbox awhile back, and i am currently putting one together with a flashed tsop. i already d/l'ed dvd2xbox; just waiting to get my box running. i will try it out next probably. i'd say the best bet is sticking with dvddecrypter, though.
have you tried restarting the xbox and playing the 3rd VOB file (the one that is pixelated) first instead of going through the playlist? and you could ftp that file back to the pc and try to play it in cyberdvd or some other dvd player that will play VOB's. that might help, too. i'm interested in this issue b/c I mainly use my xbox as a media box to play dvd divx files on. instead of burning the movies, i was thinking about just buying huge hd's and putting them in my xbox and my pc. i always have my xbox hooked to the pc. i like having all my movies accessible without putting in a disc.
well, let me know how this works out!!!