CCE works fine on my XP Pro (with SP2) system.
I tend to use DVD2SVCD (with D2SRoba) with CCE (V2.50) as my encoder. It gives very good results in a relatively short time, although some reckon that multipassing with CCE is better. From my experience you'll be hard pressed to see the difference.
I've not tried backingup a DVD like this but use it to convert avi files to DVD. It is supposed to do it though. Look at the guides & tutorials within the Video Editing software forum.
Regards Xbox backups I think you need a modded Xbox first & backup through FTP from the Xbox to PC. Xbox disks are not readable on a PC, I think they're written from the outside in.