This problem I have encountered before and found out this is caused by Vobsub when you upgrade to v2.25 above versions.
If you use Vobsub v2.23, will be no problem to play files from CD-R/DVD-R regardless which media player programs (MPC, WMP9...) you use.
I think, it is a bug of "unrar.dll" file come with v2.25+ versions upgrade pack.
From shoorter.com.cn, instruction only say copy this file to Windows32 overwrite the old file, no re-register needed (in fact, cannot re-register, you will got error message).
Still looking for solution.....
Or... a wild guess, this problem only affects to English-OS ?
At least, My PC is.