The only time I've had trouble with a disc in my PC, the disc itself was dirty. Just a couple of tiny little specks, didn't even see them when I put the disc in. For whatever reason, the BD drive in my PC is much more sensitive to dust than my set-top box. Upgrading the software probably won't matter, unless there's features in PDVD12 that you want. I would make sure the software is completely up to date, though. Like any BD player, it does require occasional updates to play the latest titles. Usually, the disc is completely unplayable when that happens, though, as opposed to what you're getting.
Welcome to Rivendell, Mister Anderson.