Try to exit the program and run again. Or upgrade to DirectX 9.0c. For further information see this article. You may try to select a "DVD Navigator" other than "Microsoft DVD Navigator" in the DVD Settings dialog. If you still experience the problem, download and install DVD43.
DirectX 9.0c Download
DVD43
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You Cannot Play a DVD-RW or a DVD+RW Disk by Using Windows Media Player or Sonic CinePlayer
(http://support.microsoft.com/default.aspx?scid=kb;en-us;814846)
SYMPTOMS
When you try to play a DVD-RW or a DVD+RW disk by using either Windows Media Player or Sonic CinePlayer from Sonic Solutions, you may receive the following error message:
The DVD key exchange for copy protection has failed. Playback is not possible.
CAUSE
This issue occurs when Copy Protection for Recordable Media (CPRM) is enabled for the DVD-RW or the DVD+RW disk, but the disk is not encrypted. The DVD component that is used to play back the DVD-RW or the DVD+RW disk tries to start an encrypted session, and it is unsuccessful because the disk is not encrypted.
RESOLUTION
Service pack information: To resolve this problem, obtain the latest service pack for Windows XP. For additional information, click the following article number to view the article in the Microsoft Knowledge Base:
322389 (http://support.microsoft.com/kb/322389/) How to obtain the latest Windows XP service pack
Hotfix information: To resolve this issue, Microsoft recommends that you download and install DirectX 9.0b or later on your computer. To do this, visit the following Microsoft Web site.
more details: http://support.microsoft.com/default.aspx?scid=kb;en-us;814846
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Key Exchange Failed
