You should maybe think about skipping your first step altogether. I think what you’re doing is the long way.
If you rip first with decrypter, you’re taking extra time you don’t need (unless you want the entire sized movie on your HDD for some reason). First its ripped, taking however long it takes on your particular system and ripping drive. Then, shrink has to do the deep analysis (if you select it), then still has to do the encoding.
If you just use shrink first, you do the deep analysis, then the ripping is done at the same time as encoding. All you need to do is analyze, then rip/encode with shrink, then use decrypter just for the burning part.
As far as quality, shrink has been very good for me so far. You should do the deep analysis option to get the best quality. As long as you don’t have TOO much compression, deep analysis works very well. Backups I’ve made with shrink seem to have very good video quality.
About your other question, I’ve heard shrink has the ability to split a movie onto 2 discs, that way you wouldn’t have any compression at all. I haven’t done it myself, but you could read the shrink tutorials in the forum here, or maybe someone else could tell you how to do it.