Help with free program to edit movies

Hi, Im in need for a free program to copy music videos from dvds to a media
center that has 1 terabyte. the dvd will have to be cut into seperate files
like a music track cd, the media player I have can play

MEEG1/2(.mpg or .vob)
Up to 720*480@30fps. 720*576@25fps
Div×3.11 4.×5.×(.avi or dvx)
Up to 720*480@30fps. ADPCM or MPEG-1&2 Layer
MPEG.4(.avi)MPEG.4 Simple Profile 720*480@30fps
2-channels MPEG.1&2 Layer3(MP3)

I dont want to copy a dvd with dvd decrypter because it makes VOB files of
the whole dvd - I need to make seperate files for all the songs of the
entire dvd.

Is there a program that can let me choose the cut locations for the dvd and
then make it a file in the best format like MPEG or AVI I dont know what is
the best file format please tell me the best file format too.

Thanks and regards
Shaun.