UOP prohibitions are programmed into a DVD at the authoring house where it's put together. UOPS are User OPerations, such as PAUSE, CHAPTER SKIP, AUDIO/SUBTITLE SURF etc, that correspond to buttons on your remote control. For any piece of video material on a DVD, the authoring house (at the request of the studio) allows (permits) or prohibits the user from pressing each of these of these buttons. UOP prohibitions are typically used for things like copyright screens and trailers (to make them unskippable); on menu pages (to prevent you from pausing, rewinding or fast-forwarding them); and sometimes during playback of the film (to prevent you from surfing audio streams or subtitles).
A lot of DVDs made solely for the French market use UOP prohibitions to stop you changing audio streams or subtitles during playback. So you can either watch the movie in French without subtitles, or in its original language with subtitles. It's a bit of a dog-in-the-manger attitude that stops fluent English (or other language) speakers from enjoying films without dubbing or subtitles.
Only a few set-top players can bypass UOP prohibitions (and it usually requires replacing your firmware with a "hacked" version). It's pretty easy to do on a PC software player using "region code" defeat software. Or as you suggested, ripping and reburning a DVD with a "Bypass P-UOPs" setting or suchlike would enable any player to surf to the "subtitles OFF" state during playback. Some ripping software is likely to be able to do this with only very minimal loss of quality.
UOPs have nothing to do with the reason that the image appears "stretched" on your monitor. All anamorphic DVDs store the image in this stretched way, and the DVD player will usually unstretch it and display it correctly. It seems your player isn't able to convert from PAL to NTSC and unstretch it at the same time.
The "vertical squeeze" trick described in Jaime's link is a clumsy but effective way to bypass the problem, but there are more convenient ways around it. Many 4x3 TV sets of less than about 7 years old have a 16x9 or "widescreen" button on the remote or in the menu - just press it and it'll unstretch the image for you. Otherwise you could play the DVDs on your computer; make sure your next DVD player can handle PAL anamorphic conversion, like the ones TheMcGuffin recommends; or buy yourself a shiny new 16x9 TV...
(if you need more tips, tricks or hacks for DVD players, www.videohelp.com
is a good place to start)