This past week, I have had the extreme pleasure of being able to use an iPod Touch.
A friend of mine's husband travels alot, and wanted a media player for his music and he also wanted to take movies with him. This seemed like the perfect fit, and I searched for a way to make this work on the iPod. There is a great program called Handbrake available for Mac and Windows. It's a free download and is extremely easy to use. The simplified version is, you put in your DVD - click on the DVD as the source - pick where you want the file to go - click iPod - click start. It took as long to make the file as the movie was long, but the end product was beautiful quality with no signs of compression in the video or audio. It seems to average about 650MB per hour of video.
You can find an excellent tutorial that goes into more detail (including screenshots) here.