First get an up to date decryption/ripping program. DVDFab HD Decrypter is free to use (though you will use up the trial of the main program as you use the free section). http://www.dvdfab.com/free.htm The free decryption/ripping part will continue to work even after the trial is finished.
Rip the dvd to the hard drive. Next, download DVDShrink from www.mrbass.org. [B]READ the guides to its use [/B]while at mrbass’s site.
Open the file with Shrink and compress to the necessary size.
Burn to disk using any burning program capable of burning dvd-video. I personally use ImgBurn (free). You should read the guides for its use at the ImgBurn forums.
Burn at 8x or 12x while using good media like Verbatim 16x…burn at half the rated speed for most mediocre stuff. (these are just general guidelines, not to be followed slavishly if you already have good experience burning your current choice of media).