P., I'm coming up on my dad's 4th death anniversary. I admit that it would not help our family to do what you are planning - it would upset my boys, and it would be painful for me. However, my family is not like your family, and you need to do what is right for you. You may want to think about how many years you would keep this tradition going. It might be hard to explain later on to your kids that you no longer feel the need to continue doing it.
I would pull out his pictures from the picture album before turning on the DVD and see how the kids do. I actually cannot watch my dad's home movies yet. It's too real. My mom couldn't listen to his cell phone message she found a few months after he died. I thought I could, but it was too hard.
All my best,