Here is something about iPod Touch supported video format that we should know:
The following video file formats are supported by iPod touch:
H.264 (Baseline Profile Level 3.0)
MPEG-4 (Simple Profile)
Audio formats:
MP3,AAC,WAV
What you need is DVD Decrypter and Videora iPod Converter, they are both free.
DVD Decrypter: http://www.mrbass.org/dvdrip/
Videora iPod Converter: http://www.videora.com/en-us/Converter/iPod/
Part1. Rip DVD to computer with DVD Decrypter :
Step1. Install DVD Decrypter and run it, put your DVD disc into your DVD-Rom, Go to the Mode menu and select IFO I mode. This will give you access to two new tabs; Input & Stream Processing.
Step2. Go to the Tools menu, select Settings, go to the IFO tab, then under Options, change File Splitting to none and press OK.
Step3. Go to the main screen and click the Stream Processing tab. Enable it and only select the first video listed. Note that home encoded movies do not support subtitles of any kind and that your file can only have one type of audio.
Then click "Decrypt" button to start ripping your DVD to hard drive.
Part2. Convert the ripped DVD or video to MP4 for iPod Touch
DVD Decrypter can only copy DVD to computer as VOB files, so you need Videora iPod Converter to convert VOB files to MP4 for iPod Touch
Step1. Install Videora iPod Converter and run it.
Step2. After you open Videora, click "Convert" tab, then select "Current Conversion" tab, click "One-Click Converter", and load your video files. Then the conversion will start automatically.
Note: If you want to convert DVD to iPod Touch with simple steps, you can try Aimersoft DVD to iPod Converter, it can convert DVD to MP4 for iPod Touch directly with high quality, I used this software for a long time, and it works really well, you can learn more about it here
http://www.aimersoft.com/dvd-to-ipod-converter.html
Part 3. Put video on iPod Touch
You need iTunes to transfer mp4 video to iPod Touch, if you don't have iTunes, you can download it from here for free:
http://www.apple.com/itunes/download/
1. Open iTunes and click "File" to add your MP4 videos into iTunes library.
2. plug in your iPod Touch to computer, then iTunes will detect your iPod Touch as a device.
3. Select your iPod Touch device on the left panel of iTunes, click "Movies" tab, check the videos you want to sync and click "Apply", done.