DVD Catalyst Free
build 1.7

Convert DVD to your iPod, your iPhone, Pocket PC, PSP, Droid, Nexus One or Zune for free. DVD Catalyst Free is the ONLY free 1-click DVD conversion utility available, and enables you to create video files for your portable devices without the need to read through complicated guides or to install a [...]

Mike from Allshadow just posted up a nice video review of DVD Catalyst 3.84.
Check out this video for a good overview of many of the features in DVD Catalyst 3+ with Booster Pack. Now the Cat takes advantage of multiple cores/processors better than before with faster conversion and better performance all around. Updated frequently, DVD [...]

Important:
Due to issues with the protection system, the trial version has been changed to convert 20% of Movies, TV Shows and Video files.
NEW:
Verizon/Motorola Droid Profile added, existing profiles modified to use actual device resolution (854×480)
New HTC Android models added (Hero, Milestone)
Forced Subtitles Checkmark added (was always enabled in previous versions)
CPU indicator checkmark (turn off to [...]

While most DVR-MS files work fine with DVD Catalyst, there are some complications with HD DVR-MS files as well as WTV files.
Due to the way DVD Catalyst was created, it’s possible to “hack” or trick DVD Catalyst into getting these to work properly. Please note that while the information below has been reported to work [...]

PDATopSoft is running a special with DVD Catalyst 3.
Purchase for $20 (or more) on your favorite software there, and get DVD Catalyst 3 as a bonus for free ($9.95 value).
The offer lasts until November 16, 2009
link

DVD Catalyst is always under development, and while it has been a little while since the release notes have been updated, there have been a few minor-version updates, un-announced, since the last posted one.
DVD Catalyst 3 v3.83.5 is currently available on most of the normal locations, including the various sales-websites. You can obtain it by [...]

Picky, but does work with a little fiddling.

To convert DVD to your Samsung s8000 Smartphone, select the Apple > iPhone profile in DVD Catalyst. The created files will play just fine, however, to get the best possible quality, click on “Modify”, and change the screen size to 720×480, and increase the video quality to at least 700kbps (1000 recommended)
Based on specs found [...]

While not officially released, based on the hardware, previews and rumours, it’s safe to say that the device will work nicely with video encoded using the HTC Touch Pro2 profile in DVD Catalyst.
Screensize as well as supported video formats are identical.

Based on specs found here
http://www.gsmarena.com/sony_ericsson_xperia_x2-2926.php
I would suggest to use the Sony Ericsson > SE Xperia X1a setting. These settings match the video specifications for the Xperia X2.