Er... What software? and How.

Doom9 and Afterdawn have zero guides on this, and instead favour DVD -> SVCD which isnt what I want.

1) Download Gordian Know rip pack
2) Rip the vobs from the dvd using dvd(fab) decrypter if you havent already
3) open DGIndex, then load the vobs
4) In dgindex, set it to demux all audio tracks
5) start a preview, and look at what it says in the frame type box, and set Video->Field operation appropriately (force film if frame type is film, otherwise just leave it)
6) Save project
7) exit dgindex
in gordian knot, under the resolution tab, set the required output resolution etc.
9) on the bitrate tab, under "total size" set how big you want the avi to be. Alos select xvid at the top right. you can ignore the rest of te stuff on this page as it gets set automatically
10) at the bottom left, click open and select the dgindex project file
11) click save and encode twice, and save the avs file
12) select the audio input file as the one that was extracted by dgindex, also set the mp3 options etc.
13) go to the xvid tab, set the 1st and second pass options (some web searching may be needed if youre new to this)
14) save and encode!
15) wait ages

All software can be got from doom9, than they also have guides on this (guides-> dvdbackup (top left panel) mpeg-4).
If you need any more help, feel free to ask.

The autogk guide is probably best if youve never done it before (does lots of the settings for you)

WinAvi

Try Auto Geordian Knot as Shakey said (Autogk), its a great suite, wont take you long to figure out.