Frankly, I've got a terabyte external drive.. I don't need to worry too much about disk space so compressing movies is mostly pointless. I'm not ever going to play videos on an iPod or iPhone or other portable device either.
With more digging, though, I learned that OS X DVD Player is capable of running movies from the ripped _TS folders just not in a nice, Front Row way. A touch more digging, I found a nifty Applescript Utility that lets you load _TS files from DVD Player automatically so I can play movies from Front Row. Seems like my problem is solved. I can use MacTheRipper to extract high quality movies and TV shows, with or without special features, and play them from my couch. Not using a mouse and keyboard is key. :)
Assuming this all works, the next step is to find an Uber remote that can replace the Apple Remote, TV remote and Cable remote (and potential EyeTV remote). I could possibly control this via my Treo but I don't think it would necessarily control the non Mac devices.
Logitech's Harmony remotes seem really nifty for the single remote solution. Expensive but nifty. I do like that first one but it is entirely too powerful for what I'm doing. :)
Hopefully tonight I'll be able to watch my first high quality central media movie!