I've heard that Handbrake is great for converting videos to the iPhone 3G format but the current version has a bug in AAC decoding so it won't work for me.
Are there any other alternatives that are easy to use but produce full quality iPhone videos?
I use tablet-encode for ripping DVDs on my Linux server. Because it's command line you can set it and forget it while it's ripping. Apparently it has a Windows version too.
Once the DVD is ripped to AVI, I convert it down to iSize on Windows using 3GP_Converter or more recently Free Ipod Video Converter.
I found 3GP_Converter when stripping down videos for my LifeDrive and then a Nokia Internet Tablet. It worked very well for producing good quality in a small file size. I haven't yet worked out the right parameters to shrink the file for the iPhone to the same size I had for the other two devices. But the results have been pretty good.