First of all, getting an entry level tablet may not be a great idea. In android arena, cheaper translates to crappier. I bought refurbished Xoom and happy about it so I will consider at least refurbished tablet, keep an eye on Fatwallet forums.
Your videos may not be in dpg format but mpg instead, take another look. Assuming that you use Windows PC regularly, use an application called as G-spot Video codec or MediaInfo to figure this out.
Take a look at applications VideoCoder or Handbrake. I personally use VideoCoder and iPad setting for iPad and Xoom
You could use AutoGK for converting it to XviD codec avi file.
You can use applications like MX player on the tablet to play all these videos.
Now to your DVD question, Have you made these DVDs yourself? Take a look at application called as DVD Decrypter. It is no longer developed but the installer should be floating around the web. It 'rips' your DVD om your PC and it just looks like you see on DVD itself 4 or files but there is one file called as name.ifo You connect this file to all of the converter applications I mentioned above and they will recognize all these VOBs at once. You go forward from there for conversion. Take a look at videohelp.com They have detailed guides with screenshots.
Drop a line if you need any more help