May have to use something like PowerDVD software.
But check out VCDHelp for more ideas for your problem. It's the best website dealing with VCD issues.
I have this problem too. I use powerdvd. To get an SVCD to work, go into file mode and look for the folder containing the mpeg file. Then just add it to your playlist and it should work. I don't know if the newer version of powerdvd works better, but this worked for me on version 3.
At least on regular VCDs, look for a file marked .dat that's hundreds of megs. Or just find the only huge file on the disc and drag it into the player. Most software won't play VCDs and SVCDs off the bat in my experience
If you find the *.dat's in the MPEGAV directory, you can use Windows Media Player 7.1 to play those dat files on a VCD (at least a conventional VCD, don't know about a SVCD file). You have to open up Windows Media Player, and when you do a "open file" you have to find that file on the VCD in your CD drive.