I use VLC for the very few movies I watch so can't say if it works on all movies. Most of the time you can just select "No disc menus" and it goes directly to the movie. Then you can select language and subs as you want in the normal windows style menus in VLC.
Since I bought the DVD, it's mine to do whatever I want to be able to see the movie. If I decide not to watch the adverticement, there isn't something they can do about it.
Good luck arguing that in court, no matter how correct you are. Lawyers cost a lot of money.
Still, no one's going to sue you personally for this. However, there have been cases of legal action against those who make "hacking tools" available. I believe there was a case against Apex for their cheap DVD players that ignored region codes, for instance.
Anyway, the keyword here is "threatened". Corporate lawyers make all kinds of baseless legal threats all the time. It should be illegal.
Since the creators of VLC are also the maintainers of libdvdcss I don't think getting sued over letting people skip unwanted content is their primary concern. They seem to be doing alright legally - probably helps to not be US-based.
