Check Toms Hardware Guide ( www.tomshardware.com) and look for an article about video editing from Matrox. It also mentions something about a MPEG-4 decoding. Check that out. Other than that I havent heard.

http://www.riphelp.com/articles/dvdripping.html

I would goto http://digital-digest.com and goto their divx section. personally i think putting a dvd to divx is the best solution for what you are doing because you can fit a dvd onto one cd. the prog you are most likely going to use to compress is FlaskMpeg, you should find it at the site.to rip my dvds i use claddvd and am happy with it. the only downfall to compressing dvds is the fact that you better do it over night because it takes about 8 hours to do it. hope that helps a little.

yea, it takes forever, i use CladDVD to rip and Flask to encode. Normally you have 6 .VOB files, each are around a gig or so (except maybe the 6th one), normally iot takes about 10minutes to rip each .VOB file, and around 35-60 minutes to encode each .VOB file to .AVI or whatever. So you're looking at about 4-8 Hours worth of encoding

In the end you have either 1 CD or 2CD's of one movies and you think to yourself. WHY??? WHYYY!!???? hehehe.
 
I just copy rented DVD's to my HD if I want to watch them again. Then eventually I buy 'em.