The best practice for a truly optimum output file will vary with the intended playback device. You need to first make the copy to a folder on your HDD, then decide which tradeoffs are acceptable. For DVDs, never use a frame size larger than 720xXXX, let the player do the upscaling on the fly. You can set DVDFab to always use Same as source for framerate in Settings, and I do recommend this for fewer sync problems. With h264 profiles, set the video bitrate so that the bits/pixel reads around .2-.25 or higher for fast action on a large screen playback device. Setting the audio encoding for "Stereo" results in a smaller file size overall and is adequate for most playback devices. The iPhone4 1080p profile has the widest range of choices for frame sizes and works well with DVDs even though it was designed for converting Blu-rays. The tradeoffs of video or audio quality (framerate, bitrate, frame size, audio format etc.) are subjective so you should experiment to see what is acceptable for your goals.
