codec and media player recomendations

Hi,

I found a good ripping program.(well its free and I can use it. Rip and burn dvd) I haven't found the best codec. I am backing up my dvds to a hard drive. I want the files to be smaller then mpeg2. I will be watching on non hd tv. I tried xvis and divx. My dvd files are still over one gb for a hour and 37 minute movie. Is there a way to get the file smaller and still look good? What codec do you recomend?

also I've tried 4 different media players and they show the file about 10% smaller then the dvd. What is wrong?

any suggestions or advice would be great. I am looking for a codec with a small file size and the best player.