It works!

DVD to Zune (mpeg4) works!
If you are trying to convert DVD files to Zune - It took me a while to figure out what works for this conversion...
I use MediaCoder ver 0.6.1 build 4050 (latest version).
The original files can be the DVD or you can use any tool to download the files to your disk as VOB and ISO.
I use the pre-set for Zune: simply go to the drop-down menus -choose "extensions" menu --> "digital media players" --> "Zune".
Now the Zune GUI extension will launch (assuming you have Firefox... you need to have FF installed because the GUI uses it).
This is the important part: in the Zune GUI, instead of using the default setting for "Video" which is "Windows Media" type, you need to select "MPEG-4 (xVid)" settings from the drop-down.
I found that using "Windows Media" video setting simply doesn't work. But using "MPEG-4 (xVid)" setting works well and files are generated. The file type is ".mp4". If you put the generated files in the Zune video synch folder, Zune software will convert them and synch them to your Zune.
I was not able to use the "Join" settings, so for multiple VOB files you get multiple mpeg-4 files.
BTW my Zune is the older 30GB model and it still works fine.