Well I am new to the modern handheld communities, but I thought I would jump in on this as I just went through this with my smartphone, and I will do with my Axim
First of all I don't know the rules of the board, and with any/all legality issues of "ripping" dvd's I won't go there unless moderator/admin states its accepted.
with that said....
Pocket Divx Encoder
This will take those "ripped" files and convert them to the size of your screen. I shrunk a full DVD down for my MPX220 phone and it worked great. (Will for my Axim once it arrives)
I heard you could re-encode other divx/xvid/etc files with it, but couldn't seem to get that working.