You can't burn DVD to CDRW on the fly simply because DVD's typically have 2-4 GB packed on to them per movie (not counting all the extra shit and language tracks). The newest dual layered DVD's can store up to 9 GB of data. A typical CDR/CDRW will give you a measely 750 MB.
What you can do is rip a DVD movie to either MPEG-4 or Divx, which will compress the movie enough to fit on a CD-R. You then burn the movie to disc and you'll be able to watch it on CD-ROM drives.
If you want to watch a CD-R on a standard DVD player, you'll have to make a VCD, most standard DVD players can't read MPEG-4 or Divx. Let me warn you though, VCD's look about as good as my grandmother, and she's dead.
I dabbled with this a bit about a year ago and promptly said fuck it, so I'm sorry I don't have any specific resources I can point you towards. IMO, video ripping is a way too much trouble to be worth it. I seem to remember Tom's Hardware having some pretty in depth articles about the subject. It was a while ago though, so you'll have to sift through the archives.
Good luck.
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We can dance if we want to, we can leave your friends behind
Cause your friends don't dance and if they don't dance
Well they're are no friends of mine
I say, we can go where we want to a place where they will never find
And we can act like we come from out of this world
Leave the real one far behind
and we can dance.
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