hey jason2811
here's some clarification for you.
when you "rip" a DVD it will ALWAYS be the same size as the source image on the DVD itself. a single side of a DVD can have one or two layers. so a single sided comsumer purchased DVD can be from 4.7 to 9 gigs approx. some DVDs will note whether they are a Dual Layer DVD or not.
the software you mentioned can convert DVDs (which use MPEG-2 compression) to other codecs, such as MPEG-4. most of the time the source can NOT be encrypted, so you have to use a program like Mac The Ripper to first rip the DVD to your hard drive and at the same time remove the encryption. then you use a program like Handbrake to convert the huge MPEG-2 DVD rip into a smaller more manageable file that uses MPEG-4 maybe.
for the sake of example...Apple uses the MPEG-4 (h.264) codec to encode movies that can be purchased and downloaded from iTunes. i've personally not bought any yet, but i've seen where these feature length movies (1.5 - 2hrs) are usually 1.2-1.5 gigs in size. i think that would be a pretty good expectation if you use handbrake (properly setup) to convert your DVD rips to MP4.
another example for you, that doesn't have to do with DVDs is Digital Video (DV). DV tapes (DV, mini DV, etc) use 12 gigs per hour. i can take a 1 hour program from my cable box that's attached to my computer and recorded it as DV in iMovie. when i take out the commercials it becomes about 40 mins in length and takes up 8-9 gigs. after i convert it to h.264 (for iPod, iPhone, AppleTV) it is then between 350-700mb.
h.264 (MP4) compression is definitely the way to go. it's the same compression codec being used for HD-DVDs. it gives small file sizes with little or no loss in quality (when conversion is setup right)
good luck