... depending on what camp you belong to.
If you're a content provider (read: greedy hollywood bastige) then it's "illegal" according to the DMCA if you do this digitally directly from the DVD. Since you're "bypassing" their security blocks...
If you take a device to clean up the video signal or have a dvd player that doesn't have macrovision out (amazingly my older Aiwa portable doesn't
) on the video outs, then you could do a analog conversion to a file using Snapstream or any other capture program. I did it with Jay and Silent Bob Strike Back and Windows Movie Maker 1.2b just to prove it could be done with my TV card and the base software built into Windows XP. Since my player doesn't have Macrovision on the video signal, the captures come out fine.
If you're a proponent of the "Fair Use" laws (which I and hopefully anyone not in the movie and recording industry generally is), then doing this for your *own personal use* is allowed by the Fair Use statutes.
It gets grey when you start talking about circumventing CSS etc... IMHO, there should be no law against doing a conversion from one format to another as long as you are following the fair use laws. What happens to the AV signal once it leaves your dvd player is none of the Movie Industry's business.
This goes for a lot of other things... You're allowed by law to have a personal backup copy for archival purposes of your movies and games and music. But with DVD and even now pc games, they've stripped that right from you by technological means to prevent you from copying the discs. Which, honestly, should be considered a violation of previous laws regarding Fair Use, because they are actively violating your right to copy for archival.
Why you would want to try to store a movie on the phone is beyond me, why not just stream it?