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 o........