To play Blu-ray you need a HDCP capable monitor, this is for copyright protection. If you don't have an HDCP capable monitor this might be causing the failure.
DVI usually doesn't support HDCP so that may well be your problem.
The drivers for Intel® HD Graphics, will support Blu-ray disc playback with the Windows Vista* and Windows 7* since some media features required for Blu-ray disc playback, including content protection, are only available in the Intel graphics driver for these operating systems.
In this case you can use the system under Windows* XP for playback of Standard/High Definition (SD/HD) video clips, DVD, and other sources of video, however not to play Blu-ray.