Ripping is the process of copying audio or video content to a hard disk, typically from removable media or media streams. Digital audio extraction is a more formal phrase applied to the ripping of audio CDs. Ripping is distinct from simple file copying, in which, the source audio/video is not formatted for ease of use in a computer filesystem. For example, the hierarchy of files making up the audio/video data on a DVD-Video disc can be encoded into a single avi file. In addition, the copied data are often compressed with appropriate codecs. Ripping is often used to shift formats, and to edit, duplicate or backup media content. Media files released on the Internet may describe the source of the rip in their names, e.g. DVD-Rip.
I would say ripping covers both a straight extract of the media "as-is" and encoding it, or ripping down to a different format.