I think everybody has given you pretty much the basics on here. I think on the iTunes or iPhone forum there's a link to HandBrake stuff.
Just be warned that you will have to play around to figure out what setting best suits your needs. I rip the DVDs at the full resolution, 1000kbps bitrate, and the AVC/H.264 Video/AAC+AC3 Audio settings. I also use automattic cropping so it takes away any black space around the edges, which occurs in some bad older transfers. Oh yeah, just noticed I have the audio up to 160kbps on the Audio & Subtitles tab. As I said, you gotta play around
Like eXan said, don't rip stuff you don't own. People like me keep whining about how iTunes should have similar capabilities so we don't have to get extremely smart to just put our darn movies and TV shows in a different format. Now I did copy a couple of DVDs that my uncle owns, but I haven't watched them yet and plan to delete them as soon as I'm done. If you get past the industry's whole technophobia, that's the exact same as someone loaning you a DVD.
If you get seriously into this, you should figure out a playlist scheme in iTunes and a storage scheme with external hard drives.