what Kerry56 said above is a slightly easier method (i.e. AutoGK) than i use…
i use the standard ‘Gordian Knot’ application with the XviD codec ( http://www.free-codecs.com/download/Koepi_XviD.htm ) … i would explain how to use it but it will take to much time even though it’s not hard once you know what to do… and you got more control over it to vs AutoGK.
with that you can generally compress movies to either 700MB or 1400MB in size… you can select pretty much any size you want but 700MB and 1400MB is pretty much ‘the standard’.
general word of advice is… if a movie is about 1hour 30minutes (or so) i generally use 700MB (sound converted down to 128kbps MP3) … if it’s around 2 hours (or more) i generally recommend 1400MB (and you can keep the original DVD’s .AC3 audio track) … and in general with a 1400MB file for your typical 2 hour movie… your looking at ‘close to dvd quality’ at a fraction the file size … comparing video quality side by side you can notice the difference between DVD and XviD but it’s minimal overall… and i would be willing to bet alot of people out there probably could not even tell the difference especially if your playing them on a standard definition TV.
with the 700MB and 1400MB methods… you will fit between 3-6 movies onto a single 4.7GB disc that way.
as for conversion time (besides setting it up in the application itself) a typical 2hour movie usually takes about 2hours encoding time on my CPU (AMD Athlon64 3500+ (2.2ghz, overclocked to 2409mhz)) … so if u got something faster you will get quicker results or if you got something slower it will take more time.
as for the h264 stuff i would recommend against that for standard DVD movie type video since XviD is pretty much standard and runs on slower stuff as it dont need a monster CPU to run… plus a moderate amount of home dvd players can play them and XBox1 running XBMC can to to play them back on your TV.
but since the OP said he’s a ‘extreme newbie’ … what i said probably looks like hieroglyphics to him lol
as for the video player i recommend… ‘The KMPlayer’ (my general video player of choice for the PC) … cause it dont have issues skipping forward or backward in .mkv (720p etc) video files with the slider bar like VLC Player does… but besides that it seems like ‘VLC Player’ is more popular… but for the reason i said alone makes it not worth using in my case.
p.s. XviD video is primary reason i still use my original XBox running XBMC (XBox Media Center) on it