Gordian Knot Setup and Audio Encoding
Step 1
Install Gordian Knot and the update. To install lame, simply unzip it and replace the old lame.exe with the new one.
Run the program and the first thing you want to do is go to the ripping tab and select a project save slot.
You can name it whatever you want and all you settings will be saved here.
Step 2
Now we have to create a DVD2AVI project. So from the ripping tab, there should be a button on the right side called DVD2AVI, press it. After DVD2AVI opens up, you'll have to load your VOB files.

If you load the first one, all the rest will load automaitcally. Now there's a vob file that should called VTS_0X_0.VOB depending on how you ripped the movie. The X could be any number because for each movie it will be different or the same, but you don't want to load a VOB file with the last digit being zero. This is the one you don't want to load because its the DVD menu screen and we don't want to encode that part.
Step 3
Now we want to preview the movie to find out what type of video it is. Before you start make sure you set the field operation to none under the video tab. Then press F5 to preview the movie.

Let the movie play for a bit and watch the statistics window. If the Video Type is around 95% and it displays FILM, then set the field operation to forced film under that video tab. If anything lower, or if the film type is NTSC you'll have to perform an IVTC. I will explain later how you do this. Also go to the color space submenu and select YUV 4:2:2.
If you have a PAL movie, preview the movie first and see if the movie plays back ok without any glitches. If you see any glitches, set the field operation to swap - field. If that didn't work, change it to none and see what happens. If neither works, leave it as it is.
Step 4
Now we have to demux the AC-3 audio. So go to the audio tab and select the track number you want to demux. You want to demux the maid audio track but to be sure of which track number it is, we can use IfoEdit to figure this out. So start the IfoEdit program and load the IFO file.

It will now display some information about the movie. As you can see in the above picture, it shows that Audio 1 is the English AC-3 audio track. So in this case, when you're selecting the audio track number, you would select track 1 to demux.
Now close IfoEdit and go back to DVD2AVI. Under the audio tab you want to select the appropriate track number. Then set the channel format to Dolby Digital and go to the Dolby Digital submenu and select demux.
Step 5
Now all we have to do is save the project. So from the file tab, go to save project and save it. When its done saving, close it and go back to Gordian Knot.
Step 6
Go to the bitrate tab and open your saved project file and another window should pop up displaying the movie but just ignore it for now. Then set the frame rate o 23.976. If your movie is PAL, change it to 25 fps.

Here you can enter the length of your movie in minutes and all the other fields should automatically be filled in. Since we are using XviD, we have to select DivX5 as the codec even though we're not using DivX5. Then select how many CD's you want your movie to be on and the size of the CD. If your movie 2 hours or more, I would recommend putting it on 2 CDs. If you go for 2 CDs you'll have to read the guide on cutting DivX movies. For the audio, you can select 128 kbps as the bitrate from the pull down menu or if you want to encode at a different bitrate, then you can select a different one. In the boxed area where it says Interleaving & AVI-Overhead, check the box to calculate frame overhead and select 1x vbr-mp3.
Step 7
Now go to the resolution tab.

If your movie is NTSC, then select input resolution as NTSC and if its PAL select PAL. Most DVD movies are 16:9 so for input pixel aspect ratio, select NTSC anamorphic (16:9). If its not 16:9 then select 4:3. The same applies to PAL movies.
Next press the auto crop button and it will automatically crop the movie for you. If you don't like how it looks, then you can adjust it by moving the slider bar. Keep an eye on the aspect error and the bits/(pixel*frame) values. For bits/(pixel*frame) you don't want this value too high, try to keep it around 0.200 to 0.350. Aspect error just tells you how much error there is in the aspect ratio. Also go to the options tab and deselect the "Follow ITU-R BT.601 Standard" button.
Now you can open the window that displays the video and check to see if your movie looks ok. Makes sure you select resized from the view tab. Now save and encode the movie by going to to the file tab in the window displaying your movie and selecting save and encode. A new window should pop up.

Under resizing choose selected output resolution. For resize filter, I would recommend using neutral bicubic. For field operations, this is where you would perform an IVTC if DVD2AVI showed your movie source as FILM with less than 95% or if the film type was NTSC. So you would select Inverse Telecine here. If DVD2AVI showed your movie as PAL movie as interlaced, select fast deinterlacing. In any other case, select none.
In the Trim section, select the last option. Then in the Compressibility Check section, select Use and set it to 5%. The press Now. We want to do this to find out the optimal compressibility of a movie. Then wait a while until it finishes.
When its done, you will want to go back to the resolution tab in Gordian Knot and check the bottom and check the Bits/Pixel*Frame section.

Here you want any value between 60% and 100%. So lets say after doing the compressibility test it was 40%, you would have to move the slider bar and change the resolution until you get somewhere between 60 and 100%. When you are done doing this, save the avs file again but this time turn compressibility off. Now another window should pop up..
Go to the Audio 1 tab.

Select your audio source which would be the AC-3 file DVD2AVI demuxed for you. Then select MP3 and make sure the bitrate is 128 kbps or whatever you set it to in the bitrate section in Gordian Knot. Check the boxes for re-calculate video bitrate and delete wav.
Now press the add audio job to encoding queue and wait for the audio to finish encoding. We will encode the video later in the next step.