As has been said, you can use shrink or nero recode or a similar program to reduce it some and keep all the dvd content (or take some out if you like). Just tell whatever program to burn to a hard drive folder rather than a burner. With nero recode at least, you can select whatever target size you like (though you can only compress so much so you might have to use a little trial and error to find the smallest size).
If you just want the main movie and want to go smaller, use dvd decryptor. Set it to ifo mode, under tools, settings, ifo mode, set file splitting to none. then rip it. It should select the main movie only if I am not mistaken. It should only give you a couple of files, one of which is a single large vob file. Rename the file extention from .vob to .mpg and discard the other files. You now have a single mpeg file for the movie that should be easilly converted to whatever format you like. This saves you from having to mess with all the diffrent dvd files and or multiple vob files.
Here are some tools, some of which should be able to convert from mpeg to various avi formats (read the program descriptions).