Take a look at WINAvi. I use it for simple stuff and, although a little slow, it works fine. But any compression is going to be very slow and my computer is older than it should be.
Also take a look at Dr. Divx. I haven't used it but the divx format is very good and constantly getting better. The other is Xvid though I don't know the compressor software for it. Like divx, xvid is a very good codec. I am sure if you go to the website that they will point you in a good direction for some compression software.
DVD to Divx how-to:
http://www.afterdawn.com/guides/arch...anamorphic.cfm