I downloaded the new update for the new dvd playing system but now when I put a DVD into my computer, it asks me to choose which part of the country I'm in, saying I only have 2 options left. Why is it doing that and how do I fix it?

You mean Region Code?

http://en.wikipedia.org/wiki/DVD_region_code

Try freeware DVD player such as VLC which ignore region coding.

It is not asking what part of your country you are in, but what country/region you are in.

Region encoding is the mechanism that enables motion picture studios to control the worldwide release of their movies. It is required by the DVD Forum (http://www.dvdforum.org/forum.shtml) in all commercial hardware DVD players. Every DVD-Video disc contains one byte of data representing a region code, which limits where the disc can be played.

http://support.apple.com/kb/HT2397

Once you have set the region in DVD Player five times it cannot be changed.

Instead, use VLC to view videos from different regions:

http://www.videolan.org/vlc/download-macosx.html

Exactly what did you download?