No you can do it with any video but it must be either mpeg 4 or H.264 (which is a mpeg 4 variation) format. For video formats for iPod see How to transfer music to my iPod (& iTunes) - for video which also gives tips on video programs you can use to convert.

If you want to convert from a dvd disk to iPod, you'll need a dvd extractor program to copy to computer. Then another to convert to mpeg 4. Tips for this both here http://www.dvd-guides.com/ & also here http://www.videohelp.com/

If you were using Mac OSX I could make recommendations.