Hi Pamenamel,
I use Cucusoft iPad Converter Suite. It can rip DVD's to your iPad as well as convert DivX, XviD, MOV, dvr-ms, rm, rmvb, MPEG, WMV, AVI … to iPad video (MP4/H.264 format). Or , or AimerSoft - just evaluate any trial version before deciding which one you want.
+ 1 handbrake, new version 0.9.5 update the iPad preset, I suppose the (1 gen)iPad setting can work for iPad 2, if can't then you can try those 3-rd party software who update the iPad Conversion Software with iPad 2 Support like iFunia~Is there a way to put DVD movies onto the ipad2 so you can watch them on flights that don't have wifi? I travel a lot....
Pam