if you have USB v2.0 you can do DivX off of it without a problem
480 Mb/sec (60MB/sec) is far more than enough for DVD. Actually, DVD itself could even work off of USB v1.0 because it only needs about 900KB/s to 1.2MB/sec, which is doable over USB v1.0.
However there aren't very many USB v2.0 adapters or peripherals out there yet, and they are expensive so I don't think it's anywhere near worth it right now.
Just put a 3.5" HD in your carputer and don't worry about it ;P