I posted this in a thread to help someone out. I figure others may want to check it out if they need help converting files for the PS3.
You can rip DVDs while maintaining video quality, full 5.1 audio, and be able to stream to your PS3. The only catch is that when you encode in h.264, it is CPU intensive and it takes about 3 hours to encode. MP4 H.264 files are playable from the PS3 harddrive.