I use VLC to rip DVDs (find out how from a quick google search.) Then, I use a program called "Super" to convert the video files to PSP MPEG-4. Super is a very useful programs and I have not yet found a video format that it won't convert to the PSP-compatible format. All you do to use it is choose PSP from a pull-down menu, drag and drop video files into the window, and press encode. after that, all you have to do is put the new file(s) in your PSP and you're good to go.

(Not to say this isn't a good How-To, of course. I just like having a way of doing it without paying for software or having to install trial software, because that stuff gets on my nerves.)