Maybe he is just trying to backup the DVDs to Divx so that theyre easier to keep on disk. Thats what I am doing for my home media center. the files will be smaller and more portable but I still have my DVD's in case I ever need to rerip
This is similar to the debate on what is considered a backup for auido - Mp3 (lossy but good) or Flac ( lossless true backups but eats space) for a simple " I want to have the file on disk somewhere " philosophy then the lossy stuff (Mp3, or in the video's case Divx) would be just fine. You are correct that HD is the furutre, but so long as he is holding the origionals somewhere safe I dont see why he should not backup to divx in the present.