What format do you want them in? 1000 dvds at an average size of 6 or 7 gb uncompressed would be considerably larger than any external hard drive that you can buy today. And you need to decide how you are going to play these files. Are you going to stream them using a PS3, or some other media player, or are you just going to run them from the computer?
Even if you did movie only, or compressed in size to fit a single layer dvd, you’re still looking at 4.3tb total, and the largest hard drives are only nominally 2tb.
So, unless you plan on buying several hard drives, it looks like you’d need to compress to either H264 files or xvid, and H264 will yield smaller files with equal quality.
Rip each movie to a hard drive using either AnyDVD or DVDFab, then convert to .mkv or .mp4 files using the H264 codec. You can do this with Handbrake or Ripbot264. But again, you need to know beforehand how you want to play the files before using one of these formats. Neither work in a regular stand alone dvd player.
Some dvd players can handle xvid avi files just fine, so if you have such a player, that means a different type of conversion and different tools. AutoGK or AviDemux would be fine for converting decrypted dvd-video to xvid .avi files.