1: Copy the files from the dvd to a hard disk folder.
2: Download and install the DIVX PRO Codec
3: Download and unzip FlaskMPEG
4: Run Flaskmpeg and open your DVD's VOB files so the movie appears in the Flaskmpeg screen.
5: Go to the codec options, and change the bitrate, and go to the advanced options and change the resolution, and speed and quality of the encoding job to your liking.
6: Flask it!, it should take about 4 hours Max, and it will encode the dvd into a .AVI file.
I have encoded DVD's to 700mb and they are still very good quality. Tweak the setting to your liking to get the ideal mix between file size and quality.
Also, there are plenty of tutorials on the net.
Wayne