If I understand how your project is set up, and what you want it to do, there is a procedural error. I don't know if it causes the Preview problem, but your disc won't work like you think it should.
1. While a Chapter Playlist is playing, the end actions for the listed chapters don't execute. So there is no point in linking the individual chapter buttons to the playlist - they will all do the same thing, which is play all the chapters in the order they are listed in the playlist.
2. With the Play All button linked to just the timeline, all you will get is the first chapter played back and then the end action will execute and take you back to the menu.
With Chapter End Actions set like you have them, the Chapter Playlist should be your "Play All" target. The chapters in the playlist should be listed in order, including the last chapter. Then give the Chapter Playlist an end action to go back to the menu.
Fix the disc navigation and then see if Preview works any better. If not, then the next thing to investigate is the software and codecs that are installed on your system.
-Jeff
The Focal Easy Guide to Adobe Encore DVD 2.0
