After playing around with MyMovies I stumbled across the fact that I could rip a DVD, merge the vob files and play on an extender without transcoding. I have the ability to fast forward with the 30s skip button too.
I used DVD shrink and VOBMerge and of course MyMovies.
1. Rip the movie with DVD Shrink and place it on a local HD like this - M:/Transformers
2. Have DVD Shrink create the Video and Audio TS folders in that folder. Takes about 15 minutes to copy. I have also been able to copy just the main movie and not all the extras and still got it to work (saves a little space).
3. After DVD shrink is done open VMC and allow MyMovies to find and download the covers and such for the new movie. Close VMC when it is complete.
4. Use VOBMerge to merge just the main movie .vob files. Instead of placing the single merged .vob in the video_ts folder place it in the main movie folder (m:/Transformers). When VOBMerge is complete delete the main movie .vob's and leave all other files and folders intact.
5. Hop on your extender and you will see the movie listed in MyMovies, select the movie and choose "Watch".
I have tested this on a Linksys DMA2100 and an Xbox 360 and have yet to come across a problem watching the movies. I am not sure how this is working and I came across it by accident when I was playing around with trying to play DVD's on an extender. It's a farely quick process and it seems to retain the 5.1 audio but I am not an expert with that so I could be wrong, but I did notice the surrond sound is the same on the extender as it is playing from a DVD player.
I added this to another post but I guess no one saw it. Let me know if I am special or if it works for everyone else too.