Blu-Ray to XBox (DiVX, MHV, etc.?)

I’ve done a bunch of Googling, but I haven’t found anything conclusive that works.

A friend of mine (yes, really a friend, that’s why I’m etchy on the details) is trying to rip Blu-Rays into something usable like a DiVX or similar. I’m too busy to do it myself, so I have him doing it. I have copied most of my 200+ DVD collection into DiVX so I can watch them from my XBox, laptop, etc. without having to go find the actual disc. I’ve started to expand to Blu-Ray.

A) Is DiVX 7 the best place to put a Blu-Ray movie for archival? It seems fairly universal as previous versions have worked so far, but MKV looks popular and newer versions may not work on the XBox and players.

B) How do I do it? We’ve been working with a VC1 file and haven’t been getting acceptable results. He did get a DiVX file, but the video was very choppy. He’s running on an i7 with 4GB of RAM, so that’s not the issue.

Obviously fewer conversions are better, but I’m more interested in something that works.

We’ve been using AnyDVD, MakeMKV, and a host of other things that I don’t remember.