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I have about 10 home video miniDVD's shot on Sony Handycam DVD camcorder. I have all the VIDEO_TS folders and would like to export/convert these into clips which represent "chapters" in each DVD so that I can a) provide a proper timestamp and b) add them to my media collection for better browsing of various clips.

I have two questions in this regard:

1. How do I make sure I keep as much quality in video and audio from the original. After all, these are all cherished memories like both my kids' births, their first birthdays, etc. I mean in terms of format (m4v, mp4, wmv, mpeg, etc.) as well as settings (frame rates, etc.)
2. Any recommendation of tools for Windows use?

Thanks in advance!