Each time you convert a video file, it loses quality. Keep that in mind.
For a start, the original video will have been perhaps 150 GB compressed into DVD mpeg 2 format VOB files. Then the person who obtained the DVD with video size at about 7-7.5 GB then converts it using a format of their choice such as mpeg 1, 2 or 4, divx, etc. and the size will probably be around 700 MB, though they may have split it into two 700 MB files. So you can see that the original size has dropped to less than 0.5% of original video size. That is a LOT of throwing out of video information. This example is standard video. The widescreen video is even larger and a greater loss of quality when shrunk down.

Most video formats are "lossy" in that they throw away information to help save and as a result reduce in size. All mpeg and divx formats are lossy. Even re-saving at max quality is going to lose 'some' information/quality due to the way the format saves.