As I type this I am ripping a DVD to a file that I can use on my iPod or Apple TV. I am using a great, free application called Handbrake. I’ve been using it for a couple of versions. There are tons of presets already loaded, but I always tweak them. I have ripped hundreds of my personal discs for use on my personal devices.
We also use it at church when people bring a DVD to play. We don’t play direct from a disc for several reasons, not the least of which is the lag time between hitting play and seeing the video roll. So, we rip DVDs that people bring for us to play into file formats that are compatible with our players.
I can rip a full resolution, h.264 file complete with a 5.1 audio track that plays on my Apple TV using a program that I downloaded off the internet for free. I love Handbrake.
Scott Link Media 
It is a very nice application! You got that right! What are the settings that you use for encoding something for your AppleTV and iPod?
I use a variation of the Apple Universal preset they provide. I increase the average bit rate to 2000. I select a “slow” deinterlace option in picture settings. If needed I select add in forced English subtitles under “audio & subtitles”. I normally set anamorphic to “none” to make sure my iPhone and iTouch can handle everything.
Remember, 4:3 videos have to be a max resolution of 640×480 or the mobile devices can’t play them.