Honestly, in my experience with 98se, if you're having issues with choppiness in vlc, which is a pretty low-key video player... you're not going to have better luck with WinDVD.
Your issue may be something like too little ram, or too little disk space (with fat 32, the less hard drive space you have, the slower your pc runs... that is... once it hits the 50% capacity mark and more)