Now days XviD AVI movie files are very popular and a good alternative of DVD movies. They can be simply carried in a single CD each. It would have a very good clarity slightly lesser than DVD movies. A DVD disc could have almost 5 XviD movies in it.
I had been looking for software to convert my DVD movies to 700 MB files. I found a cool and user friendly software FairUse Wizard which can do all jobs mentioned here.

How to use Fair use Wizard

1. Get latest version of FUW from here and install it into your computer.
2. Open Fair Use Wizard. You will get the main window. Here I use version 2.8.
3. Before starting encoding, click on options
4. Here we can choose which codec to be used, size of the file and encoding speed. Quality encoding speed will take more time to encode. But it can produce high quality video.
5. The combination of next generation codec H.264 with MP4 and AVI are also available for encoding.
6. The x264 codec would also be preferable to encode video. It is the open source version of H.264 codec. MKV container will be most selective one to host x264 video.
7. You can also select desired subtitle from subtitle track drop down menu. Remember the DVD movie must have selected subtitle.
8. Click next. You will get back the main window.
9. If you are not familiar with advanced options, simply select Full auto mode. It is highly recommended. Name the project and choose a destination folder. Click next.         
10. A new window will pop up. It will ask for the source drive or DVD image file from your hard drive.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            I recommend using image file for encoding. It would speed up encoding. Back up DVD movie into your hard disk as image file using any freeware like DVD Shrink.
11. Go to next stage. The program itself will do all other tasks. Encoding time would depend upon your system configuration.

Start watching movie just after finishing all processes. Enjoy! 
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