Agreed, there's really nothing in the existing PC that you can salvage. As to the suggestion of adding a video card to the existing PC...maybe. But I bet it's AGP, so even if you find an AGP card that can do hardware acceleration, you won't be able to re-use the card if you decide the old PC...
Gotta be honest...that sounds like PowerDVD needs an update. Your PC does sound a bit low-end, but I would anticipate that you'd simply have skipping/jerky playback/etc., not a nothing-at-all reaction. Cyberlink.com has a "BD Adviser" tool you can download for free. Download it and run...
I haven't tried an overseas Blu-Ray before. Does anyone know if they run at 25 fps? I've gotten the occasional R2 DVD and the "PAL speedup" annoys me if it's a movie I know well (voices seem slightly off, etc.).