The easiest method for encoding divx from dvd source is..
1. Rip movies to hard drive with DVD Decrypter
http://www.dvddecrypter.com/
2. Encode movies to divx with PocketDivXEncoder
http://divx.ppccool.com/
3. Watch divx movie on ppc with Betaplayer
http://divx.ppccool.com/
All of the above are free.. PocketDivxEncoder gives you sliders to control bitrate, volume and brightness enhancement, as well as target framesize.. You can pick the Archos AV300 profile for 640x480 divx files..