If you don't care about the DRM, just play the MP4 you bought from iTunes. What DeSnousa is saying is anything you do to the file will degrade it's quality, and it's pretty decent now, so why muck it up.
You could always use the S-video out and feed that back through a DV camcorder into iMovie and create a ripped movie like that, but why bother.
you can't covert purchased movie directly to those format. use Backup application. then all back up you bought from ITS to DVD. then, copy it to Mac. do encoding process. especially, ITS movie can't burn DVD from itunes 7.0.