i use Avex video to iPod suite. It converts DVDs or any other video format. Originally i was using it for my ipod video, but the videos transferred pretty well to my iphone. They could be in a higher bitrate, but they still look pretty good. I'll try to copy one tonight specifically for my phone and see how it works out.
and it automatically disables the screensaver if you wish
I think if you just want to convert DVDs it costs $30, but if you want the whole package, it's $45.