For one, I've also gotten an error while using "dvd://1" I fixed it by pointing it to the VIDEO_TS folder on the DVD itself. It was able to find the dvd file find then.
The option you should add is "-dvd-device g:\VIDEO_TS" where g:\ is your dvd drive. This option is in addition to "dvd://1".
Another problem I've had is that the DVD audio volume is way too low when played on the 8100. To solve this, you can use the LAME audio encoder, which allows you to adjust the volume level on-the-fly.
Here is the command line I use to encode DVDs, which includes using the LAME audio encoder and ramping the volume up by "9", whatever that means
mencoder -vf scale=240:180 dvd://1 -dvd-device G:\VIDEO_TS -o dvd.avi -of avi -ovc lavc -oac mp3lame -lavcopts vcodec=mpeg4:vbitrate=240 -lameopts br=64:vol=9