Watching Films on Hp Ipaq hx4700 - how do you do it????

I have a Hp Ipaq hx4700 running windows mobile 2003 (I'm thinking of updating to wm5/6 but this isn't what this thread is about)
I'm wanting to watch films on my PDA but as you proberbly know each film is about 6-8gb, I have read about converter/encoder/compressors but I am totally confuddled!!
I don't want to pay for something I'm going to use a few times as the ones I've seen are £50+ which is a lot to watch a few films on a PDA, how do you do it? The files on the dvd are also non-compatable for windows media player on windows mobile I believe and am unsure what to do.
I have been told about Window Media Encoder that is free but I don't really know what it does, has anyone used this before?
Can anyone suggest how/ what to use to do this??
Thanks
P.S I'm not very good with changing settings and downloading codecs ect. I'm a bit dumb! Is there anything simple like me??)