Try DVDStudio http://www.pqdvd.com/.
I use this to convert DVD files to an Ipaq (320 x 240) but it can be used to convert dvd files to different resolutions 640 x 480 etc and with varying compression ratios. The larger respolutions (a complete DVD aved to CDr!) look perfectly acceptable to me but this wolud be down to personal tastes and preferences.
The user interface is very intuitive and you can download a trial version (I think this only compresses the first 10 minutes of video) but it will give you a 'feel' for the medium and an idea if it meets your needs.
Best of luck in your new interests...