As posted elsewhere, DVD Shrink does not work with whatever this new Sony protection has done, but I found a way to make it work.
I ripped the whole DVD to the hard drive, using AnyDVD. Scissors finished the process, but Grudge2 did not, it hung on the last file, Video_TS.VOB, 144k. Since Scissors did complete, I tried to open the files with AnyDVD, and got a Video_TS.VOB not found error. Looking in the folder, sure enough it wasn't there, though I had gotten no errors during the rip.
So I just stuck in the DVD and copied the VideoTS_VOB file directly to the folder with the rest of the files on my hard drive. After that, DVD Shrink worked fine, and the result plays fine.
With Grudge2, AnyDVD hung on that file, so I just canceled and copied that file directly as I had done with Scissors. It worked fine and plays fine. Hope this helps others until the fix comes along (as it always does, AnyDVD and its support is topnotch)
How do you rip a movie with Anydvd???