I posted how I've encoded several shows and anime with great playback but it the post was dismissed as the files were not movies. Try this free program called
AlltoAvi. Do not use restrictive mode. Use TCPMP (attached below) for video playback. Try encoding a dvd if it can and use the settings below. Please report back if it worked well.
Note: if using tcpmp you can watch the file as it is being converted on your computer using htc network or something similar.
AlltoAvi settings:
"Keep Aspect Ratio" box must be checked.
Screen size 640xXXX(Just type in 640)
Bi Cubic
Video encoder is XVID
Video bitrate is 400
Audio Bitrate 96
Subtitle is for subtitles lol
TCPMP is set to microdrive mode which I don't know if it helps
Options>Settings>select page>Buffering then check the microdrive box.
Unfortunately I have no dvds to check if this program can even encode them.