I don't think D-Links small SOHO switches are any worse than others out there. It is more likely that you got a dud. There is no reason even the crappiest switch out there should not be able to give you full blast on two ports. If there are any corners to be cut it would most likely show when you have all 8 ports going full throttle on it, but even then, 1600Mbps ( 8 ports * 100Mbps * 2 full duplex) is quite trivial these days.
That said, from what I gather D-Link is a bit of a scrappy company, focusing more on lower prices than actual value. They are not alone.
You may want to try connecting two computers through the switch (only) and running a bandwidth test. Using Window's SMB with Windows 2000 and higher should net you around 8.5 MB/sec. You said you had the occasional hiccup with the original setup, so I would expect this to be the same with a new switch. In other words, you may be exceeding the 8.5MB/sec barrier and there is no buffering. Could that be a possibility?
If you are going to pick up a new switch I can recommend you 3com switches. USRobotics may also be OK, as would Netgear and Linksys. However, you may want to take stacking options into account when you buy as different manufacturers use different incompatible stacking methods.
You may want to go with a Linksys that can be stacked with your router. Just be warned that their silver colored gigabit switches are supposedly quite noisy due to a high speed fan. This may have changed with newer revisions, but I doubt it.
Linksys Wired Networking product catalogue for your convenience.
Furthermore, if bandwidth is your thing you may want to look into getting a gigabit switch. 3com has 5 and 8 port models (OfficeConnect Unmanaged Switches) that are quite affordable and fanless (the 16-port model has a "smart" fan). This should give you some room for future growth as well. I am thinking you may even need it now if the ISOs you speak of are DVDs.
My head says go with a 3com (even gigabit), but, as always, you need to figure price and availability into that equation. You would also need a gigabit NIC for the server, but maybe your set top cannot use this. I dunno.
At any rate, to stream a DVD without any pre-caching would most likely require 1000Mbps ethernet. 200Mbps would have been quite enough, but of course it doesn't work in steps like that.
Link to 5-port 3com GigE switch (unmanaged)
BTW, is this Linksys router a WRT54G? If it is, or another model with a built-in switch, have you tried only using that for the Server<-->Set top Box?
To summarize:
1. What you are trying to achieve may be impossible at 100Mbps speeds.
2. You acquired a dud D-Link in the process of trying to fix it.
EDIT:
Wait a minute. What pipe have I been puffing on? DVD is max 10 mega-bit, right? 100Mbps should be plenty. For some reason I keep thinking it is 10MB/sec max transfer rate. SORRY! If a video is skipping it is likely the link is at 10Mbps and not an issue of "scraping the ceiling" of 100Mbps as I wrote above. It is more likely that this scraping is happening at 10Mbps, but this can only be seen by looking at the computers' link speed in Windows or by colored LEDs on the switch (showing 10/100Mbps half/full duplex, etc)
Is your set top device (and all others) really running at 100Mbps?