Hello Tom- I am new to this forums so I will try to answer your question first without voicing my opinions on what is and what should be legal.
First, you may want to try a forum like HTPCnews.com for the answer to your question.
Personally, I have "stored" about half of my $1500+ legal DVD collection to my media server for playback on my Home Theater via my HTPC. I would not suggest converting DVDs to Divx ever. The quality is just bad. IF you must convert to a file size that is that small (<1gig per movie) at least use xvid. I do not personally do that anymore since more storage is so cheap now.
Currently, I use DVDShrink to backup my DVDs to my hard drive. I usually use 45% compression so that the DVDS are under 4 gigs each. I specify the output location on my media server for it to be saved. I highly recommmend DVDShrink, it is free works great and I cannot find any law anywhere that would make it illegal to backup copies of your own DVDs for personal use. Just search for DVDShrink on the web, or let me know if you want more info.
Then, I play the dvds from my couch on my tv through my htpc using sagetv. It has a feature called "imported video files" that originizes the files aplhabetically. Admittedly it does not have all the features you have, but I only have 50 or so DVDS stored on my media server, so it works for me. For a more powerful media management/viewing tool try J River Media Player. I have tried it and is awesome.
