Anyway, if you haven't though about this topic then good for you. Your lack of foresight might save you a lot of unnecessary work as in a few years we'll all be done with physical discs for music and movies. If you have thought about it then you probably got so exasperated you gave up. Maybe it's time for another try?
What is your prefered method of ripping dvds (into itunes if possible)?
Answering this question as it relates to my current preference is not difficult, but there are currently many limitations in this area that might give you pause about embarking on this project (as a means to archive DVD's you already own of course). Why would you rip DVD's you got from your Netflix account, that would be illegal?
The crux of the issue basically comes down to how future-proof do you want your DVD rips to be? You see, with current storage limitations being what they are it is very hard to justify ripping the DVD's (resulting in the original MPEG-2 file) and not subsequently encoding them into a more compressed format (MPEG-2 is already somewhat compressed).
The problem exists because although our audio equipment has reached technological maturity to the point that you can scientifically prove that most people's ears and brain cannot distinguish between rock music encoded at 256kbps mp3 and the original CD wav file, the eye is a much more complicated organ than the ear. Subsequently the amount of information necessary to present a picture at 24 frames per second combined with an audio track is exponentially greater than audio alone. This is even ignoring that most people listen to music in stereo but frequently listen to the audio track of their DVD's in 5.1 Dolby surround sound.
Therefore, even if you ripped the MPEG-2 video off of your DVD's and did not compress it for storage but dedicated a giant array of hard disks to store your video (a DVD is about 4 GB, your average 60 GB hard disk would only store 15 movies) you would still not be future proof because the next television you buy will undoubtedly be capable of at least 720p HDTV (720 lines of vertical resolution) whereas current DVD's are only 480p (480 lines of vertical resolution).
A lot of this is oversimplification but to really dig into it would confuse me and you. I've tried to understand HDTV. It's not worth it. Suffice it to say, a current generation DVD will likely look very blocky on a HDTV you buy in 5 years (not to mention what it would look like if you compressed the video further).
Having prefaced with all of that my personal preference is to use Handbrake. I use the Mac version but there is also a windows version. The good thing about Handbrake is that it doesn't confuse you as much as some ripping programs. It automatically detects the disc and gives you an easy list of what to rip by length. You then set a couple of parameters and commence ripping.
If you are ripping and encoding for a video ipod this is a pretty good tutorial (it shows the mac screenshots but the windows layout is essentially the same). However, if you want to watch your archived DVD's on your TV or computer you should increase the bitrate and the resolution of the encoded video. Adjusting those is really probably too complicated to go into right now.
What I recommend is that you do a couple of test encodes and watch it on your target (tv, computer, whatever) and see how it looks. If it's too blocky try increasing the bitrate, if it looks too upscaled try increasing the resolution. Two pass encoding improves the quality but takes twice as long. You should probably just look around in the program and use the help to figure things out. Trial and error is your friend.
As for what format to encode into I use vanilla MPEG-4 (.mp4 is the file-type). This probably provides the smallest file size for files that are still playable on multiple machines and even some DVD players if you burn the resulting file to CD. For me a movie takes up about 500 MB after encoding (but that is for my ipod and thus at a fairly low bitrate). I have watched these files on my (standard definition) television and they are not bad but would probably look horrible on an HDTV. Now that things like the Apple TV exist that can play h.264 encoded videos on your HDTV you could consider using h.264 instead of vanilla MPEG-4 (files will be smaller at the same quality), but you will limit yourself when trying to play it on multiple targets.
Finally (finally!), I usually encode the audio at around 160 kbps and it sounds pretty good but it's not 5.1 surround. After your final file is encoded just use the import function of iTunes and you should be able to view them. Remember that when you import a video into iTunes it copies it into the library so you now have two copies. View the iTunes copy and then delete the original.
The Smartest Man You Know