I have compressed dozens of DVD9 discs sucessfully with DVD2OneX, but have had problems with three DVDs so far:
"About Schmidt" just causes DVD2OneX 1.0.1 to quit immediately. These other two have the same problem as you've reported with Animatrix:
Pee Wee's Big Adventure
Schoolhouse Rock (Disk 1)
DVD2OneX will stop encoding mid-process and report the same error message that all files & folder need to be copied.
I was able to find a workaround for the problem in both of the latter cases. The problem seemed to be that it wasn't the main (movie) VOB that was the problem. It would get compressed fine. But rather some extra VOB at the end that was causing the problem. DVD2OneX seems to quit while rebuilding the .ifo file. So, to put it simply, I processed the original DVD with OSEx, then ran DVD2OneX. After it failed (near the end of conversion) i just replaced the three main video_ts files with the ones from the files processed by OSEx:
And the resulting VIDEO_TS folder plays fine (except for the vob at the end that's incomletely processed).
In both cases, the VOBs that didn't compress were part of the bonus materials and were rather small. So I just reprocessed the main movie vob so it would fit on a DVD-R with the uncompressed vob at the end. It took some time to determine the final size to fill the DVD-R completely, but it worked.
I still can't figure out why "About Schmidt" causes DVD2OneX to immediately lock up after choosing it's VIDEO_TS folder. I plan on trying version 1.1 tonight but I'm not too optimistic. I'm trying to find DVD2OneX version 1.0 somewhere, but cannot. Does anyone have that available somewhere?