You're going to need probably two separate pieces of software. One to rip the DVD files, the other to do the conversion.
You can use DVD Decrypter to rip the DVD to your computer. Once it's on your computer you can then start converting it.
Easily one of the best video converters to use is MeGUI. It's extremely powerful.
http://mewiki.project357.com/wiki/MeGUI/iPod_Conversion_Guide
There's a guide to using MeGUI after you've ripped the DVD to your hard drive.
Here's another guide using the same software setup:
http://arstechnica.com/old/content/2005/10/ipod-video.ars/6
It's written by arstechnica, so it should hopefully be clear.
Another guide on installing MeGUI, in case you're running into issues:
http://mewiki.project357.com/wiki/MeGUI/Installation
You can either create your own video profile, obeying the requirements for an iPod, or just download a video profile from here:
http://forum.doom9.org/showthread.php?t=101813
MeGUI usually comes with a lot of preset profiles anyway though.
BTW it's all free
MeGUI:
http://sourceforge.net/projects/megui/
DVD Decrypter:
http://www.mrbass.org/dvdrip/