My Win98 Machine was able to use DVDs just fine... heck, I was playing DVDs even.
Also, Just tested: seems win95 can read DVD discs, but, since DVD didn't e xist then it still refers to them as "CD-ROM" discs, regardless of what is actually within the drive. Still reads them fine, though.
EDIT: also, my vista refers to my empty DVD-RW drive as a... well, a DVD-RW drive.