In my case I already copied the VIDEO_TS folder to my hard drive.
Here is the command for mencoder:
mencoder -dvd-device "myvideobackup/VIDEO_TS" dvd:// -ovc xvid -oac mp3lame -lameopts cbr:br=128 -xvidencopts pass=2:bitrate=-700000 -o myvideobackup.avi
Replace "-dvd-device myvideobackup/VIDEO_TS" with the location of your backup files or the /dev device of your DVD drive.
The -o myvideobackup.avi is of course the name of the resulting file.
Also note the "dvd://" option, that means take everything/all VOBs, I'm not sure why so many guides specify dvd://1 which means just the first chapter/VOB which is usually not what anyone would want. Imagine if you backup your weddding/other important video and find you only have the first part/chapter?
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