perfectly legal if you own or rented the dvd. Try searching www.versiontracker.com or www.macupdate.com for "dvd to vcd". I'd suggest converting to DivX or XviD instead of VCD and upgrading your set-top dvd player to one that plays DivX CDs as opposed as DivX has several advantages over vcd:
1) MUCH better quality for sound + video
2) subtitle support
3) entire movies on 1 CDR
There are increasing numbers of dvd+divx players on the market, starting at around $100, the best are the ones from KiSS Technologies. They even have some higher-end models with internal HDDs and RJ45 Ethernet ports for streaming movies from the net or from networked computers.