"You need to restart your computer"

That message popped up after I inserted a DVD Movie, so I restarted it and everything looks like it's working fine.

My question though is..

1.) Is it safe to try and play the movie again?

2.) Why would it do that in the first place?

Was it in a gray box? If so, then what you got was a kernel panic.

Pop in the DVD and see if you get the problem again. Make sure you're running no other programs to see if the problem can be isolated to the DVD.

my guess is iDVD painced, rebooting would have cleared the condition. I'd play it again, if it does it again I'd start looking at the console logs

Most people get a kernel panic once every year or two.

If it happens frequently, it's usually down to a memory fault.

I put the movie back in and it made it through the whole thing without getting any error.

Hope it doesn't start happening frequently, I'd hate for it to be the RAM I upgraded a couple weeks ago.

If you're worried your RAM may be at fault you can use a memory tester like Memtest to check (costs $1.39). Personally I'd just wait and see if it happens again ;D