I just encoded my first DVD to PSP using some pre-set tools, apps from
here
Its designed to create a .pmp file that will run with pspmod and is said to be the best quality you can get.
I encoded "Waiting.Unrated" from my dvd-rom to an 800+mb .pmp file. The results are impressive. Picture looks really clean and clear and Full-Screen. It was also the first time i try that PMPmod app. This was really simple for someone that didn't feel like learning how to get all the shit tweaked for optimum quality.
give a try (the encoding does takes several hours).
It will also encode your divx to pmp as well (just read the instructions).
check that shit out yo!