An ok guide. I am glad that somebody finally made one using vdub. Although I don't see a screenshot of it. That is all I ever use to record tv on my pc, and encode movies.
I find it easier to use dvdshrink, and virtualdub mpeg2 by ffchandler. Rip the dvd in 1 single 4 or 8gb vob file----> import the vob directly into vdub mpeg2 and encode. This is basically what you did but this way all you need is 2 programs. And I believe it would take less time.
The most practical way for most people that are on this site, is just to use pocketdivx encoder.