Comment 30 for bug 191475

Kivech,

VLC wouldn't autoplay with the current launch command even if it was added to the list, so we just need to wait for a return of the ability to launch by command string.

Please ignore the workaround I posted above, as the per-user method is a little bit tricky compared with the following system-wide approach:

First of all, if you followed my other crappy method, open the Terminal and delete that file in ~/.local/share/applications, as it's not needed with the system-wide approach;

rm ~/.local/share/applications/vlc.desktop

Keep the Terminal open and copy and paste this command into it:
gksudo gedit /etc/gnome/defaults.list

Change the line "x-content/video-dvd=totem.desktop" to "x-content/video-dvd=vlc.desktop". Close and save.

Note: You need to repeat the following steps each time VLC is updated.

Next, edit the following two files by pressing alt+f2, typing your password and then by navigating to both /usr/share/applications/vlc.desktop and /usr/share/app-install/desktop/vlc.desktop. Right-click on them and select "Properties" in the context menu, then replace the "exec=vlc %U" launch command of both files to:

exec=vlc --vout-filter deinterlace --deinterlace-mode blend --volume 512 %m

Close and save both files. Finally, navigate to Nautilus>Edit>Preferences>Media>DVD Video, select VLC and then reboot or logout before you insert a DVD.

Nathan