Well, yes and no. Since the DVD is edited for content, random encounters aren't shown, but battles which pertain to the storyline (i.e. Elevoret and the spider robot during the SeeD exam) are included. The longer battles are also cut to show only the more exciting parts, so that you son't have to sit through Squall hacking away at something for 30 minutes. To make it appear more like a movie, the menu screens are also deleated.

However, the DVD isn't just the non-interactive stuff - the rest is all there: traveling on the world map, talking to other characters, and walking thorugh towns. You do get to see the choices he makes when talking to others, fighting bosses, or when selecting a party. It is basically like watching somebody's game, just with the business end (junctioning, saving, leveling up, ect.) removed.