DVD to iPod touch (iTunes)? I have a big pile of DVDs and DivX encoded files with animation shorts that I sometimes would like to watch on my iPod touch 4G while I am on the go. What would be a quick and easy way to transfer the movies to iTunes and then to my iPod touch? Sometimes the DVD has a menu that list all the shorts, I would like to have each short as a separate files (or "item" in iTunes). 

Is there also a way to (automagically) optimize the movies for viewing on the iPod (i.e. adjust quality and resolution for the small iPod touch screen and for better battery life).
This would be ideal: iTunes is my main repository for all my movies in the best possible quality so they'd also work on the large screen. Once they are copied over to an iPod they get reencoded with lesser bitrate and resolution.
The best, or, most commonly used method for transcoding DVDs and DivX files to an iPod would be Handbrake.  Handbrake has presets for almost all current iDevices.  I'd start by reading the Handbrake Mac GUI Guide and selecting iPod Touch from the destination presets (image on Stage 2 from the guide) and adjusting select a target bit rate of 700ish for a device with that small of a screen.

If you're interested in scripting out the process to save time Handbrake has a great CLI and guide that would streamline the process.

Another popular solution would be MacTheRipper.