For the hell of it, did a search on the MSN search engine and this link came up.
http://forum.doom9.org/showthread.php?s=&postid=365490
Exact same problem, but their solution is mind boggling. Like I previously said, I was able to back it up with DVD Shrink and may have to settle for that. It appears to be in the way AnyDVD does it's decrypting. They mention the updated DVD Decrypter solves the problem, but then again, it's not CloneDVD.
If you or your sister come up with a better work-around... please let me know. BTW... THANKS for your help so far, hope to hear from you this weekend.