I believe you're right about premiere glomming off the DVD software's filter. I noted this line in the helpfile of my DVD authoring software:
Included Cyberlink's PowerDVD player. MyDVD uses this player to decode MPEG-2 video streams; you can also use it to play DVDs.
Note: We have also included an installer for Ligos' LSX-MPEG player. This player fixes several problems with video playback; please see the Known Issues section for more information, especially if you use Windows NT.
Sure enough, it shows that LIGOS decoder being used to decode it in WMP properties.
When I opened the .mpg file across the network on my other machine with WMP, it shows the powerDVD codec as being used.
Here's the proof it works:
http://home.earthlink.net/~ronmcc/_uimages/rousize.gif
http://home.earthlink.net/~ronmcc/_uimages/rouprop.gif
http://home.earthlink.net/~ronmcc/_uimages/rouprem.jpg(220k)
Seems one should be able to get it to work if you have DVD playback software installed.
I'm only using the one movie for this vid, but hey, once you can open an mpeg2 file in Premiere, you can chop out and transcode whatever you want to the codec of your choice, ne?
I'm just using the movie as one big file, setting rough ins and outs in the clip window and dragging them to the timeline.
I'm rendering previews in Huffyuv.
No instabilities noted so far.