A few months ago I sold a British (Region 2) DVD to an American customer. About a month later I got an anguished email, asking why it wouldn't work and was giving an error message. Here are the reasons:
Back in the dawn of time the DVD manufacturers decided that they wanted to restrict DVD sales, and charge different prices for the same films etc. in different countries. Sometimes there were good reasons for this, such as differing languages, but the main reason is financial. On average new DVDs manufactured for Britain costs two to three times as much as their American equivalents, even if the contents are identical. For example, even after postage charges it's often cheaper for Brits to buy US TV series direct from the USA, rather than from cut-price British vendors.
The way that manufacturers try to ensure that disks only sell where they're supposed to is called "Region Coding". The USA is Region 1, Europe is Region 2, and so forth. Theoretically all DVD players should be able to play disks for one Region and for "All Regions" (sometimes called "Region 0", DVDs manufactured without the special coded signals to indicate regions). It should be made clear that with very few exceptions all region coding is designed to benefit the disk manufacturers, not the customer.
Some disks are sold for single regions, others can be played in two or more.
Many DVD players are sold in more than one region and can be "region-hacked" to show DVDs from multiple regions. Some even come that way out of the box.
The exception to all this is the USA (Region 1). Because it's by far the biggest market, and where most of the film producers are based, there's a lot of pressure on vendors to manufacture DVD players solely for the USA. These can rarely be modified to play DVDs from other regions.
Effectively, the USA is a self-contained market. Most disks are sold there, and are cheaper there than elsewhere, so it's rarely a problem for American buyers. But it's usually far easier for a Brit to play an American DVD, than for an American to play a British DVD.
If for some reason you still want to play Region 2 DVDs - for example, you want a TV series or a film that hasn't made it to the USA - you'll need to get hold of a region-hacked player. This is much harder in the USA than elsewhere, but is just about possible. Alternatively you may be able to persuade a computer with a DVD drive to play them - but computers are also region coded, and you may find that you can only change regions a few times before you lose the ability to change.
One way around this is to bypass a computer's region coding completely - videolan, www.vidolan.org is a versatile media player that can do this.
There are problems, but they can be solved. To avoid disappointment PLEASE think about this before bidding on DVDs sold by British vendors.
Finally, a small apology - an earlier version of this guide said that Region 2 DVDs coded the signal differently to Region 1, and that US buyers might need a PAL-compatible TV to see them. That simply isn't true, and crept in because this started out as a guide on laserdisc players, which is now a separate document.