I think the official line is... If you live in a one man room, with a lockable door then you need one. If you live a 2+ man room, then you need one between you, not one each, so one person pays for the licence, and the others chip in.
If you are a criminal in prison, you can have a tv with out a licence.
(Go figure).
Simple.
For watching just DVDs. The law only requires for a Licence for the equipment that receives the broadcast. Hence a PCTV card in your computer needs a TV licence.
If you can find a large monitor (some screens are like this) that doesn't have a TV receiver in in and hook it up to a DVD player that doesn't have a receiver either then you have cracked it.
Some larger screens have receivers similar to computer cards that you can just remove. Obviously if you own one, then you may get stung so just sell it and get a receipt. The detector vans home in on the IF of the Triple superhetrdyne receviers so no receiver and the detector van wont come (you'll just have to use the SCART, etc. not the co-ax as you would need a receiver again thus a Licence would be needed).
Phone the licencing people for assistance first, ensuring you go up the food chain of phone monkeys first, so you know the info is cosher. Then maybe take the p1ss and invite one of the inspectors round to check your equipment is kosher. A formal type letter explaining that you don't have a screen capable of receiveing broadcasts may be handy too, because now they have a system where they know which houses haven't got valid licences and may just pop up and turn up.
Obviously some of them are going to either a. brain dead or b. jobsworths and try to get you to pay up for the screen regardless of it's capability of picking up the broadcast so it may be a good idea to touch base with the rip off merchants first. Although I am under the impression if you can't receive the signal then you don't have to pay.
If on the other hand you purchase a sky tv system, then you have to pay again, because sky pumps out BBC channels. Thus you own a system capable of picking up the TV broadcasts thus you pay.