I bought an Archos AV500, and the picture looks very good. A film takes 1-2 GB, and it has a 60GB disk. It can also play back on a TV.
The biggest problem with any of these devices is getting the video on in the first place. The Archos has the big advantage of being able to record direct from a video output from a TV or DVD.
Otherwise I've found DVDCopy from Intervideo to be very useful and easy to use. For more control you can use Virtual Dub.
You can also get some very good deals on portable DVD players at the moment. If you only want to watch stuff on DVD, one of these may be your best bet.
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