actually someone a while ago posted this script and I have been playing all over the place to find the best settings. I also added the options to extract english subtitles, but you should take that out if you're not using it. Everybody has their preferences of what they want out of video and there are way too many compromises that need to be made.
just remember if you use the subtitles option, you have to use the -sub -slang english
on playback
#!/bin/sh
#######################################################################
# dvd2z
#
# This script is a front end for mencoder to convert a track of a DVD
# into a format suitable for playing on a PDA using Kino2 or equivalent.
# The resulting AVI requires about 80MB/hour using the settings below,
# so a full feature film will fit comfortably onto a 256MB flash card.
# (Terminator 3 needs 188MB)
#
# Some things you may want to alter:
#
# The track number is usually 1 for the main feature of a film.
#
# The video bitrate is set here at 192kbps ("vbitrate=192"). Try
# experimenting with lower values until the quality is unacceptable.
#
# The audio bitrate is 64kbps ("br=64"). Can be reduced but not a lot
# to gain.
#
# Brightness usually has to be boosted for PDA; here it's set to 6
# using "eq=6". Leave this option out for standard brightness.
#
# Frame size is 320:240. Can be changed but the scaler may not like it
# on replay.
#
# Frame rate can be reduced to 15 ("-ofps 15") to give player less
# work. Makes a small saving in file size.
#
# Mono audio - a small saving - can be done using "mode=3".
#######################################################################
if [ $# -lt 2 ]
then
echo "Usage: dvd2z