Firstly, I am using Windows 200 OS and am trying to play a DVD movie using Win2K compatible dvd decoders. I've tried the following:

• VLC media player
• DivX (crashes)
• Media Player Classic

The problem is that although it displays the video, the picture is very dark and colorless. It's not even viewable. What's the problem here? Is it the cable connection inside the tower? Is it the Operating System?

Are you using a physical DVD or an image from your hard drive? If it's from the physical drive, DVDs have different tracks according to the origin, and DVD drives can only switch back and forth between these different regions only a couple of times. Once you have spent the switches, it keeps the last one and you cannot switch back again.
Each DVD drive comes with a player, you can't read it directly from VLC or Media Player Classic. So even if it's an image, maybe you can get some DVD players from download.com, such as Easy DVD Player.
It may also be a codec problem, you should try and get the latest codecs from codecguide.com, the K-lite pack has a bunch of codecs that may solve your problem.

Well my DVD drive just came with the drive alone. It didn't come with anything else besides the Nero 7 Demo. It's an internal DVD+-RW burner (plays DVDs)

Well mine came with a DVD burner AND a Power DVD (player), why don't you get a free DVD player from donwload.com or any similar site and try with that. AND also get the latest codecs.

In most cases, the VLC Player should be able to play videos (even those that requires a codec to be installed). Does this dark problem happen to all DVDs you try to play on this computer? Have you tried to play the same DVDs on another computer and see if the issue is the same there as well?

Well it turns out that nothing was wrong with My OS, Decoder, Drive nor video card. I found out that the display settings for "overlay" had its brightness down to 0, saturation 0 and contrast to 0. I simply set them to 100 and now it works fine.