I just posted a link to this software the other day. I've been using it for like 2 years now and it is awesome in my opinion. It converts the video perfectly for use on the iPhone, iPhone 3G or iPod Touch 1st and 2nd generation, whether jailbroken or not. I normally convert my DVD movies with
DVD Shrink and then increase the volume in the settings of Videora and it comes out better than the iTunes digital copy versions, to me.
I've uploaded 3 screenshots to show you my settings. In the 2nd screenshot which is in the Video tab of the program, the last option is Bitrate. You can increase this to a larger size if the quality is not up to your standards but the filesize will be larger. I find that 1536kbps produces a fairly decent picture to be viewed on a screen such as the iPhone.
In the 3rd screenshot, which is in the Audio tab of the program, you'll notice the last option is Volume. I have mine set at 180% which produces a louder, clearer sound for the iPhone or iPod Touch because I find that the digital copies that most Blu-ray's provide through iTunes just aren't loud enough. There is also a Bitrate option for the audio for which I find it alright set at 160kbps, as all of my MP3s are set to. It's perfectly understandable if you choose to set it at a higher rate because you definitely will get more clarity and definition from the sound. But again, remember if you increase the Bitrate, the filesize will invariably increase as well.