As I described on my Video Conversions page, I prefer to use Microsoft Windows Media Encoder to convert my movies to WMV format for my Zune. There’s lots of other conversion software available on the Internet (free and commercial), so if you don’t want to use WME I’m sure you’ll find something that will meet your needs.
One free application you might want to take a look at is MediaCoder, which is a full featured video converter capable of converting to many different video formats. The current version as of today is 0.6.0 Build 3905, so it still seems to be a beta version. The interface for this program seemed a bit too complicated, although there was a way to set the display in “Simple” mode to hide all the advanced controls.
I tested it today by converting a VOB file from a DVD to WMV format, and it seemed to do the conversion rather quickly. The created WMV file also synced to my Zune without transcoding, so it passed that test. However, the WMV file was not indexed properly so I couldn’t rewind or fast forward through it on my Zune (or with Windows Media Player on my Desktop PC). So, that wasn’t a good thing.
Another free application called Handbrake is highly recommended by a lot of users for it’s robustness. It was originally developed for the Apple Mac, but a version for the Microsoft Windows platform now exists. It has similar features as MediaCoder, but it can only create MP4 files (which is what the iPod uses). So, of you have a 2nd generation Zune this program could work for you. What’s really nice about Handbrake is the clean user interface, and the ability to easily read DVDs directly for converting movies to MP4 format. I recently tested Handbrake in converting a DVD movie and it did seem to require transcoding during syncing of the generated MP4 file (Note, that I used the default conversion settings, so there may be a way to avoid the transcoding).
In any case, there’s lots of converters out their and everybody has their favorite. Mine is still the Windows Media Encoder!