I would like to share my experience of using HandBrake with you.
No doubt you can purchase movies from the iTunes Store ready for iPhone/iPod Touch consumption, but if you already own the DVD, you don't want to waste your money on the same movie a second time. Instead, you can rip the DVD to a video file on your computer, move it into iTunes Library, and then sync it to your iPhone/iPod Touch. The program I'd like to recommend to do this is called HandBrake, and it's available for free on both Windows and Mac.
The following tutorial will show you how to rip DVD to iPhone/iPod Touch format using HandBrake. You can follow this guide to convert DVD to iPod Touch/iPhone whether you are using Windows OS or Mac OS X (10.5 or later).
Let's take a look at how it works:
Step 1. Download HandBrake from http://handbrake.fr/?article=download according to your computer OS and install it.

Step 2. Insert a DVD and launch HandBrake. If HandBrake doesn't recognize the DVD as a source automatically, you may have to click "Browse" and direct HandBrake to your DVD drive.
Step 3. HandBrake will analyze the DVD and let you choose the title and chapters you want to rip for your iPhone/iPod Touch (in general, you'll want the first title and every chapter). You can get an idea of which title is the main DVD title by choosing the title duration that matches the movie's playtime.
Step 4. Click the "Presets" menu in Windows, or the "Presets" button on the top right of the HandBrake window on the Mac. You'll see several presets; choose the iPhone and iPod Touch preset.
Step 5. Now just click the "Encode Video" button (Windows) or Start button (Mac) and sit back while HandBrake rips the DVD to one big file. This can take a while, so you won't be able to rip a DVD on your way out the door to the airport. Make sure you plan ahead.
Step 6. When HandBrake finishes ripping the DVD, drag the file into iTunes for syncing to your iPod Touch/iPhone whenever you want to.
Note
HandBrake Windows doesn't do a very good job on ripping DVDs to iPod Touch/iPhone format. Here, I'd like to recommend the DVD to iPhone Converter from Clone2Go. This piece of software can merge several DVD chapters into a single file, trim the video length, extract sound tracks from DVD as audio file, support M4V, MP4, MKV, AVI, FLV, WMV, and a lot more output video/audio formats, customize profile for the output file and support sorts of mobile players like iPod Touch, iPhone, Apple TV, PSP, Zune, BlackBerry, etc.
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