You'll need a decryption program in order to rip from the disk to the hard drive. The two best for this are DVDFab and AnyDVD. DVDFab has a free section within it called DVDFab HD Decrypter, which will continue to work as a ripping program even after the trial for the main part of the program ends. The only problem is that it will lag behind the paid version by a month or so regarding new protection schemes.
Once you have it on the hard drive, you can convert to xvid with any number of different programs. Many of the best ones are free. Take a look at AutoGK, FairUse Wizard, AviDemux, and Xvid4PSP.
If your hardware is capable of playing H264 codec without problems, you can also convert to mpeg4 or .mkv files. I would advise using a free program called Handbrake for this process, though it can also be done in AviDemux and several other programs.