Front Row in 10.5 introduces support for VIDEO_TS folders (ripped DVDs) without resorting to third party software like in 10.4. All you have to do is copy the VIDEO_TS folder off a DVD to a place that Front Row can access (typically ~/Movies/MovieName). You can copy it with the Finder, or use a DVD ripper like MacTheRipper.
When you launch Front Row, navigate to the Movies section, and then to your various ripped DVDs. Once launched, they are controlled just like an inserted DVD disc. Cover artwork is also possible by placing an image titled Preview.jpg inside the VIDEO_TS folder. Front Row will cycle through the cover art if you have multiple ripped DVDs.
[robg adds: A comment on the queue site notes that "An alias to directory with VIDEO_TS will work fine without copying. Aliases to any upper-level directory will also work -- Front Row will let you navigate through directories."]
Mac OS X Hints
http://hints.macworld.com/article.php?story=20071029182617245