Personally Ill download or record to my PC. I then use Windows Media Encoder to take the files down to 320x240, and I mess around with the compression settings to get my files to acceptable size. I then use Windows Media Player on the PDA to watch the movies/tv shows in full screen. On my 1gb SD card I currently have 1 movie, an episode of Futurama, 3 episodes of the Amazing Race, and an episode of the apprentice.
There are also some DVD to PPC rippers that supossedly work pretty good and can be found on sites like pocketgear.com and handango.com.