Here's one better.
http://divx.ppccool.com/
Pocket Divx Encoder is Freeware, it will convert many formats to avi, including VOB right off the dvd.
On the opening screen you select the picture of the device the movie will be played on and it makes the settings for you. (raise audio quality to the max though, unless you like heavily compressed audio)
It supports 2 pass encoding and works with xvid, it supports b-frames (very cool) and is geared to work with another free program, Betaplayer (the only ppc media player to support bframes)
I converted 10 divx movies (700 meg) through this to about 250-340 megs per movie in about 4 hours.
If you are considering checking out a dvd solution, i highly recommend this.