Let me just add my 2 cents.
For the jittery issue, try doing a quick reload. If this resolves the jittery playback, then you've ran into an issue with Xine_Player that has been described as a memory leak. I get it, others get it. It's a small annoyance, but a quick reload only takes a few seconds so it's not a huge issue. If that doesn't resolve it, make sure the video plays fine elsewhere and maybe look at top from a console while you are playing a movie and see if something is eatting up your CPU/memory.
For ripping DVDs I'm a big fan of HandBrake. I rip/transcode my movies to h.264 and typically end up around 1-1.5G. On a 32" 720p LCD I can't tell the difference between ripped and original. Other advantages are I only have the movie, no need to go through a menu, although some may think it's a disadvantage because you can no longer get to special features or alternate endings and such. HandBrake can burn the subtitles into the video so no worries there, although I have ran into the occasional movie where it didn't correctly determine the subtitle track and had to set it and re-rip the movie. If you haven't tried the latest HandBrake, give it a shot. The GUI is now working under Linux and it's improving quickly.
My 750G drive is almost completely full. If I didn't rip/transcode I'd probably need 4+TB of data, going back to when 1TB was quite a bit more than $100. I'd also need the physical space for the extra drives. If I never transcoded a movie and bought a new drive whenever I ran out of space, I'd likely be out at least $500, my core would be full internally, and I'd have 2 or 3 external drives stuck outside of it. Or more likely, I'd have bought the bullet and spent even more $ for a dedicated NAS setup. I currently have 910 videos in LMCE, although to be fair over half of them are TV series episodes.