HandBrake is an open-source, GPL-licensed, multiplatform, multithreaded video transcoder, available for MacOS X, Linux and Windows.

Screenshots

Supported sources:

Any DVD-like source: VIDEO_TS folder, DVD image or real DVD (unencrypted–protection methods including CSS are not supported internally and must be handled externally with third-party software and libraries), and some .VOB and .TS files
Most any multimedia file it can get libavformat to read and libavcodec to decode.
Outputs:

File format: MP4, MKV, AVI or OGM
Video: MPEG-4, H.264, or Theora (1 or 2 passes or constant quantizer/rate encoding)
Audio: AAC, MP3, Vorbis or AC-3 pass-through (supports encoding of several audio tracks)
Misc features:

Chapter selection
Basic subtitle support (burned into the picture)
Integrated bitrate calculator
Picture deinterlacing, cropping and scaling
Grayscale encoding

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