The chroma bug happens because making progressive scan frames from DVD's interlaced (really) video fields requires separate strategies for film source versus live TV/video source.
DVD (and AFAIK U.S. HDTV and DTV) provides one row of color for every two rows of pixels, in other words for film source, scan lines 1 and 2 share the same color, lines 3 and 4 share the same color, etc. Unfortunately when some DVD players get a set of odd scan lines, they apply the color that belongs to scan lines 1 and 2 to scan lines 1 and 3. Then when the player gets a set of even scan lines it applies the color that belongs to scan lines 3 and 4 to scan lines 2 and 4. So color patches may have thin streaks of the wrong color at the extreme top and bottom, and colored diagonal edges may seem more jagged.
(In addition, on DVD every two pixels in a row also share the same color but this does not contribute to the chroma bug.)
It is more obtrusive with computer generated video such as in Toy Story and Bug's Life since details and color are more precisely positioned on the scan lines.
It is more obtrusive with reds and oranges since the human eye is more sensitive to contrasting colored streaks within these colors.
The problem does not exist with laser disk and regular TV broadcasts because each scan line has its own color. (In these media the number of possible color changes across a scan line is much more limited than one color pixel for every two luminance pixels of DVD.)