My experience with DVD drives...
Case 1: I put a DVD drive in my iMac/350 and it plays DVDs just fine in Mac OS X v10.2.8 (G3 at 350 MHz, 512k of L2, ATI Rage 128 with 8 MB VRAM).
Case 2: My wife's PowerBook G3 Pismo has a DVD drive and it plays DVDs just fine in Mac OS X v10.3.9 (G3 at 400 MHz, 1 MB of L2, ATI Rage 128 Mobility with 8 MB of VRAM).
Case 3: My Beige G3 has a DVD drive and it plays DVDs just fine in Mac OS X v10.3.9 (both with the original G3 at 266 MHz and later with a G4 at 533 Mhz, originally 512k of L2 and later with 1 MB of L2, both setups using an ATI Radeon 7000 with 32 MB of VRAM).
Apple has a system requirement of 400 MHz for the software decoding DVD Player, though I think it actually requires is a video fast enough to play DVDs as I've used it on systems with both a G3/266 and a G3/350 and it works great.
It was under the assumption that the video processor and video memory made the biggest difference with DVD playback that I never got my Wallstreet (which has been upgraded to a G4 at 500 MHz with 1 MB of L2) a DVD-ROM drive. This system only has an ATI Rage Lite with 4 MB of VRAM... which I doubt would cut it for playing DVDs.
As I recall the ATI Rage 128 card in my 8600/300 (which came out of a Blue & White) had the DVD decoder on it... I'll check to see. If it does, I don't need it (that is a Rhapsody system and doesn't work with DVDs). It should just plug into the Rage 128 card on Blue & Whites without one.