First things first. Handbrake on the Windows Platform does NOT decrypt Commercial DVDs. Let me repeat this. It does NOT decrypt commercial DVDs. There are other applications to handle this part of the process.
You'll need something such as AnyDVD, DVD43 or DVD Decryptor for this task. (Note: Please note that these applications are not legal in all countries. You should consult the law in your own country before using these applications. We do not provide support for 3rd party applications!)

This guide will talk you through how to use install and use Handbrake. Let's begin:

# Stage 1 – Install Handbrake.

Simply download the “Windows GUI” from the Handbrake download page then run the installer. It's that simple. If you get a prompt telling you that you don’t have the correct version of .Net framework installed, then you’ll need to download this. Google will help you with this.

Windows Vista Users

As of version 0.9.2 you should no longer need to give HandBrake admin rights, however if you run into problems you should add admin rights for the application.

To do this simply right click the shortcut, Select Properties, Click the "Compatibility" Tab, Check "Run this program as an Administrator", Press "Apply", then "OK"
Remember: This has to be done for all shortcut's of Handbrake. You could alternatively simply set admin rights on the exe itself (Under the Program Files Directory or wherever you installed it.)

# Stage 2 – Using Handbrake

When you launch the program you will be faced with the above interface. This is the point where you… DON’T run away in fear. It’s not as scary as it looks. So, you want to rip a video to your hard disk?

# Stage 3 – Selecting a Source file

Firstly what you need to do is click the “Browse” button which is in the Source box. If you're selecting a DVD source simply click "Browse", however if you wish to select an ISO or TS/MPG file then first select the "File" radio selection.

Depending on what option you select, you will either see a file or folder selection window appear.

Assuming you have the DVD option selected, (Thats the default option) you will get a folder dialog box up on the screen. You’ll see the name of the DVD listed followed by a drive letter above. Click the + arrow and you’ll then see a “VIDEO_TS” folder appear below it. Select this and press ok.

If you selected the file option, simply browse to the location where your source input file is located and select it.

Once you've selected your source and clicked "OK" you'll see another window appear. Read what it says then press the "OK" button. You'll see a command prompt window appear behind this window for around 10~60 seconds. Once the DVD has been scanned, you will be returned to the original Handbrake window (as per the first screenshot).

# Stage 4 – Selecting a DVD Title

There is a drop-down menu named "DVD Title:". You are given a list of Titles on the DVD. Select the one you wish to encode. (The one with the longest duration is usually the main movie.) You can either leave the DVD chapters dropdowns set to auto or select the range of chapters you'd like to encode.

# Stage 5 – Setting up the Output File.

Click the "Browse" button in the Destination box. Browse to where you wish to save the output video. Type in a file name. Click "Save".

# Stage 6 – Encoding Settings (using presets)

Choose a preset from the Preset list. This will automatically setup the all the required settings. All you need to do now is press the "Encode Video" button and wait for it to finish.

# Stage 6.1 – Encoding Settings without presets

You'll need to do some experimentation when setting options manually. I recommend you read: http://handbrake.m0k.org/forum/viewtopic.php?t=382 This details settings other Handbrake users have used. You will probably find this very useful. There is alot of good information under the "HandBrake for Mac, Piece-by-Piece" section. Yes, it's for the Mac platform, but the majority of the information will still be relevant.