For those of you who are having difficulty figuring out how to 'try' the mencoder method I have automated the steps in an installation routine with simple instructions.
You can go to files.bippleniter.com for the installation script. (I'm too noob to post URL's) As with any executable you download from the internet you should scan it over and over until you are satisfied it is virus free. =)
The Mencoder method I'm using and have automated doesn't help 'easily' with DVD but makes it a drag/drop solution for most .wmv, .avi, and .vob files.
The mencoder settings that are in the batch files are the ones that work for me. Tweak to your liking in:
Instructions (duplicated on website)
1. Run installer
2. Drag Video to ENCODE BLACKBERRY VIDEO icon on the desktop
3. After conversion completes; videos are located on your desktop in a folder labeled "BLACKBERRY VIDEOS"