This is the first screen you will see when you open FairUse Wizard 2. So first of all you need to create a new project. Set the name of your project (1) and then select a folder in your hard to see that FairUse will rip the DVD into (2). As both the DVD and the output file will be put there there should be more than 6-7GB free in that hard disk. Then click Next (3) to go to the next step.

The Options button (next to Next) will take you to an options screen which is not really needed unless you want to enable expert options (use external codecs, change format from .avi to .mkv) so we will not cover it here. However there is an option to change the language in there so you may want to change it if you are not familiar with English/

Then you will be asked to select the drive that contains the DVD you want to convert (1). You can also select an ISO file already in your hard disk. When you're done click OK (2).

As FairUse Wizard 2 cannot copy protected discs you have to pass the protection almost all commercial DVDs have another way. The easiest way is to download and install AnyDVD. It sits in the tray and does all the work! (this works not only with FairUse but any program that does not support protected DVDs). The other way is to read our guide about how to extract a DVD to an ISO file using DVD Decrypter (follow it up to Step 3). Note that you will need double the hard disk space and some extra time, but this method is free.

Here we have the video settings. First of all you can select the video codec (1). XviD and H264 come with Fairuse, to enable the rest of them you need to install the codecs that are grayed out. For most users XviD is the best choice so we will select it here. Next you can select the preferred size of the output file and select whether to do 2 passes or not (2). I really suggest you enable it, as although it takes a lot of time, it also improves the quality greatly.
Next come the encoding settings (3). The options are: Encoding speed, where you set the bar below depending on if you want better quality or faster encoding, Encoding Speed ESS, which is the same thing but sets the right settings for optimum standalone XviD/DivX players support, iPod Video, which automatically sets the right settings for encoding the video for your iPod and finally, Codec settings that allows you to set codec options manually.
Following the video settings come the audio ones (4). Here you can add/remove audio streams to your output file (you can add up to 2 audio streams). In the left area you see the streams you have added and in the right area you can select the sound codec (Mp3 or AAC) and the bitrate. Unless you want 5.1 audio, Mp3 at 128kbps should be fine.
Following up you can set the resolution you want (5). The default size should be fine, if you plan to playback the video in your TV you may as well select Use TV display mode. In the Files settings (6) right next to it you can set the segments you want to split the file to (for example if you select 1300MB output file and 2 segments it will create 2 files of about 650MB each). Defer processing (7) will put the project in a queue and let you start a new one to process all of them in the end. When you are done click Next (8) to move on.

You can read our FAQ for H.264 and decide yourself whether to use it instead of XviD or not. You can read the FAQ here.

That it! Your video is ready!

If you need help there is no better place than the Official Fairuse Forums which are hosted in our site.