Just the other day, a friend showed me a web site that had software downloads to modify the region of the DVD-ROM in my laptop! It works great, the player software doesn't see the region change and thus doesn't increment the region counter. I won't post the URL here, because I'm not sure if it violates the anti-bootleg policy of HTF, but it has a very obvious name, so just search Google or something. It had software for all kinds of different PC DVD players.
I do not do bootlegs, BTW. . .I just like foreign films!
Martin, the best drive (IMHO, and I've used a bunch) is the Pioneer slot-loader. There are numerous pages (search on google) that can provide you with the region free firmware.
Your software DVD player should be able to do the NTSC-PAL conversion and output to the VGA output with no problem.
Here is the Pioneer (good price too): http://www.directron.com/pioneer16x.html
I asked the very same questions last week. I've just installed the Pioneer 106s today and it works well. I'm using a demo copy of PowerDVD, but I've ordered the full version from Amazon (cheaper than downloading the full version!).
I've already flashed the drive bios and I'm using DVDGenie to force the regional encoding off.