I use VideoReDO to remove ads and null frames from my over the air HDTV recordings. Even so the file sizes are big. What's the best way to convert the files from mpeg2 to H264 so I can reduce the file size without giving up too much quality? Are there hardware H264 encoders that can speed this up with the right software package? I might also consider ripping my approximately 1000 DVDs to harddrive and convert to H264 so they are all on my HTPC as an alternative to a series of DVD carrousels.

I also use VideoReDo. Best MPEG editor their is out there. I hope they finally finish their version for MPEG-4/H.264 editing.

This is a good read on H.264:
http://www.dvd-guides.com/content/view/143/59/

H.264 Encoders:

x264 (open source and regarded as best quality)
Mainconcept Reference H.264/AVC ($590)
Mainconcept Reference H.264/AVC Pro ($2300)
Quicktime Pro
Nero Recode (Nero Digital)
Procoder 3
Sorenson Squeeze

I am fairly impressed by the Movavi Video Converter and its ease of use. I have a feeling that they use either ffdshow or x264 for their encoder. If they use x264 then its going to be a good choice.
http://movavi.com/videoconverter/

There is also these free options which uses the x264 codec:
http://planetdvb.net/staxrip
http://www.erightsoft.com/SUPER.html

Keep in mind most DVDs are encrypted with copy protection (CSS). And don't ask how to avoid this issue here as it is most likely against forum rules. All I can say is one word on this - "Google".

A good site for questions like this in Doom9 or VideoHelp

Handbrake will encode a DVD to x264. I use it, it's awesome.

Handbrake will encode a DVD to x264. I use it, it's awesome.

Can it be used to compress a DVD9 to burn a DVD to get "less reduced" pq?

I also use VideoReDo. Best MPEG editor their is out there. I hope they finally finish their version for MPEG-4/H.264 editing.It will be great when they finish that. I also asked them if they'll have an option to convert mpeg2 to h264 and they said yes. :) http://www.videoredo.net/msgBoard/showthread.php?t=3350&page=8

H.264 Encoders:
x264 (open source and regarded as best quality)
Mainconcept Reference H.264/AVC ($590)
Mainconcept Reference H.264/AVC Pro ($2300)
Quicktime Pro
Nero Recode (Nero Digital)
Procoder 3
Sorenson Squeeze
I've downloaded trial version of Nero 8. Seems to do a good job of reducing file size of my HDTV content

Keep in mind most DVDs are encrypted with copy protection (CSS). And don't ask how to avoid this issue here as it is most likely against forum rules. All I can say is one word on this - "Google".
Already know how to do this. I own all the DVDs I rip, so I'm clean. I tested Nero 8 on a DVD to harddrive rip to reduce about 4:1. I got the dreaded "ActiveMovie Window" pop up when plying back with Nero. Sounds like there's an issue with a playback codec, or the splitter in Nero. I tried playing back with a different player and it was fine so I think the h264 files created by Nero are OK.

I'm still in the process of expirementing/evaluating to see if I can accept the quality reduction. If I can accept it at 4:1 then I figure I can just about fit all 700 of my DVD discs onto a 1 tera byte hard drive. I can buy these for $240 and with raid you need 2. So that's $480 to store 700 discs or about $0.70 per disc to file away in my hard drive and have instant access. Not too bad. Of course ripping my 700 DVDs won't be a fun process. If I store without H264 compression then the cost goes up to about $2.80 per disc.

Handbrake will encode a DVD to x264. I use it, it's awesome.I'll have to check it out.

Make sure you check your settings with x264. I think by default it's encodes are out of spec for HD/BD playback. Make sure the level is set to 4.1.