I have the onboard AC97 on my mobo, running Mandrake 8.1 with the stock drake OSS stuff installed. I'm using Xine v0.9.7 without any problems. Are you able to play mpeg video or avi video without any problems? I don't have DVD here, so I can't really do a side by side test with you unless it's using a different format.Does anyone else have a vis AC97 playing fine with xine? It would be good to swap output or something.
Reach me on IRC if you want to try it.