What you need to know is that the software is not the only thing you should be concerned about. The decoders matter as well, I would say more than the player.
If you are interested in free then use Media Player Classic as your player, with Dscaler5 as your MPEG2 (DVD) decoder, and ffdshow for the rest of your formats.
If you don't mind spending some money then you should look at Zoom Player as your player, with Nvidia PureVideo decoder as your MPEG2 decoder, and again ffdshow for the rest.
For both of these cases to optimize playback quality visit the guide
here.
It mostly depends on your setup. If you are using this on a laptop or desktop then go with the free setup. But if this will be used on a dedicated HTPC connected to a HDTV then try the free setup, but consider investing in at least the Nvidia Decoder.