Considering that the eMac uses the same graphics card as the iMac G4, it's pretty certain that you'll be able to watch DVD's with it. I don't know that the apple dvd player is compatible with external drives, but there are other media players out there that would do the job.
The original eMac for the education had a combo drive, now it just has a CDR drive. Probably cause Apple dosen't want it competing with the new iMac. Plus, I would never get a eMac, it looks like a frosted nipple, the G4 iMac is cool with me!
To me there would be very little benefit of buying *just* an external DVD-ROM drive just so you can watch DVDs on an eMac! It's like, either buy an external DVD-RW or just get a dang DVD player for your TV.
...or wait and see what they have in store for the eMac in the future. I have a feeling they'll be adding in that combo drive someday (like the iBooks). Only this time it won't be engineering in the way of progress, just bullheadedness on the part of Apple for deciding to release the eMac to the public in the first place! I've still got mixed feelings about that.