hmm I think you are a bit mixed up on a few concepts here... let me try to straighten it out for you a little.
You don't "add [ISO's] to [your] Media director". A LMCE installation consists of one "core" (which may be a dedicated core, having no media functionality at all, or a "hybrid" which is a core plus a Media Director in one); plus any number of additional Media Directors.
Media Directors (not cores) typically have no hard drive or other form of storage, so it is not normal to place media on a Media Director, as you would have to add a hard drive. The core, naturally, has a hard drive, but even then it is probably preferable not to put media on that drive either. My advice would be to keep your media on a remote device such as your normal home PC (Win, Mac, Linux, whatever) or a dedicated NAS device.
MDs are not DHCP servers, and DHCP has nothing at all to do with auto detecting files. Your core is your DHCP server (see here
http://wiki.linuxmce.org/index.php/Network_Setup ) and DHCP is used to detect
devices such as your PC or NAS, not files. If you create a normal Windows or NAS SMB share on your PC or NAS (with read AND write access for all), once the core has detected that device, it will then go on and detect these shares. When prompted, confirm which of the shares it finds are to be used for media - when asked, tell it you want to use LMCE's Folder Structure (not the Public option).
It will then create the appropriate media folders underneath your share (audio/video/etc) - now simply move your media into the correct folder and wait for LMCE to scan them. They will be added to the media database so that you can play them.
NOTE: if you ripped these DVDs yourself, and didn't use LMCE to do this, then 1) you will be missing the metadata required for them to be displayed in some views and 2) you will not be able to use the DVD chapters. The first can be fixed manually, by adding metatags, the latter is not easy to get around, but may not worry you.
