Look at the first GUIDE I linked to.
Video DVDs use a codec which results in big files, thus DVDs with up to 8.5GB capacity are used to store one movie and some extras.
To get smaller files, you use HandBrake (and a ripper of your choice) to transcode those big files to smaller ones.
Btw, there are literally hundreds of threads covering this exact subject.
Depends on the CPU inside your Mac. On my iBook G4 with 1GHz, it could take 15 hours (I encoded via two passes), on my C2D Mac it takes less than two hours.