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So I heartily recommend Dolby Headphone with whatever headphones you have lying around, but getting a receiver with that built-in is going to bust your $200 budget. So just now I figured, "Hey, I'll look for a little outboard box like I used to have, except a newer one that uses Dolby Headphone!" And I did find one, the JVC SU-DH1 ( JVC: http://sn.im/s2nuy)...but it looks like they don't make it anymore.
What I DID find were a number of kits that paired a processor with a set of wireless headphones. Here are three: the Sennheiser RS 130 can be found quite inexpensively, but it uses SRS surround, which I've never really liked. The Sony MDR-DS3000 uses a proprietary surround method, and is still friendly to your budget. The Pioneer SE-DIR800C has a list price way above your budget but the street price makes them worth a hard look: they are the only ones like this I could find that actually had the official Dolby Headphone system. (c|net review: http://sn.im/s2mhk).
Important: I haven't used any of these products I'm linking to, but I'm in a situation similar to yours and have found that the Dolby Headphone processing is just the ticket, even with budget headphones. Note that the Pioneer and Sony above have both digital and analog inputs, so I think you could plug the DVD in via a digital input and the VMC with the analog; hopefully you can switch between them on the device. The official Dolby Headphone site is at http://sn.im/dolbyheadphone.