I had the same problem. I tried half a dozen different things but wasn't satisfied with any of them. But now I think I've found a good one.
Have you tried
bigdsvideo.com?
I followed the tutorial for "Ripping DVDs" and "Windows Media Encoding" and his methods work like a charm. Programs I used were SmartRipper, DVDx 2.2, and Windows Media Encoder 9. Best of all, the programs he uses are FREE! It does take a few different programs for the whole process and does take a long time to go from DVD to PPC, but it is worth it. I haven't tried his divx/avi encoding method. Also since he is an active forum user you can send him a pm and he may be able to help you. Anyway, good luck to you and check out bigdsvideo if you haven't already!