First - Welcome to Mobilitysite. Lots of good info and ppl here.
Second - When you pause the movie just hit "print screen" on your keyboard and save the image as a jpeg file. Then, you can select it as your backgraound image. Keep in mind when movies are paused they don't always have a nice clean/clear image. :exc:
Third - I'm not sure you'll find a lot of good free DVD ripping software. I'd suggest searching thru the forums here to see what other people are using. :)