I read somewhere once that using your computer while it is transcoding can cause the problem you are having. You could try leaving your computer alone while it does this and see if that helps.
Another easy fix: you can buy a DVD player that will play file types other than DVD format. I bought one for around $30 that will play AVI files. Look for the DivX logo. Most movies will appear slightly smaller than a widescreen movie, but at least you can watch them on your television.
If you are interested in more complicated techniques with better software, I would recommend afterdawn.com.
You may be new to all of this, but I was also new to it not that long ago!
Good Luck
Dano