So I have some movies in avi format that I want to watch on my ipad. Obviously this feature is not build in itunes, as apple wants you ony to watch purchased content. I did some googeling around, found some paid software that did not look trust worthy either to put on my mac, finally found this little open source project: HandBrake. And it works great. I have my movies at another mac in my house network, and did not even have to get up from my couch, just pointed to the remote disk, through a few movies in the queue, and my son will have movies to watch on the ipad... I think HandBrake even rips DVDs directly...
These guys even have a repo on github, so you know this is for real... real great tool :)