Zeddy, the short answer to your request is that the DPA is not nearly as restrictive as most people think.
In the specific instance you're talking about, it's the V5 form. This records the name of the previous registered owner because it protects you, by giving you details that you can verify to ensure you're not be defrauded or otherwise cheated. Under Section 29 of the DPA, disclosure of information is permitted for the purposes of preventing crime.
As for Johnny's point, I believe that there is a review of this practice, and it has been condemned in the House of Commons. The DPA specifically allows those with a 'reasonable cause' to access information under certain circumstances, but it appears the DVLA is taking an overly liberal view of what 'reasonable cause' might entail. The Information Commissioner is currently reviewing the DVLA's practices in this regard, but I don't believe there's likely to be any sort of judgement for a while.