[Editor's note: The MPAA and most media companies argue that you can't legally copy or convert commercial DVDs for any reason. We (and others) think that, if you own a DVD, you should be able to override its copy protection to make a backup copy or to convert its content for viewing on other devices. Currently, the law isn't entirely clear one way or the other. So our advice is: If you don't own it, don't do it. If you do own it, think before you rip.]
That's because HandBrake requires VLC in order to read (and then transcode) encrypted DVDs--and most DVDs you can buy these days are indeed encrypted. And the latest version of VLC actually changes which code libraries it uses for DVD decrypting and playback, meaning HandBrake can no longer take advantage of the library it's long depended upon for that purpose. So if you've upgraded to VLC Player 2.0 and attempt to rip a DVD with HandBrake, you'll encounter an error message suggesting that you don't have the right version of VLC installed.
Luckily, there's an easy fix. First, you could download an older copy of VLC and rename your newer version, but that's annoying. The better solution is to download the missing library directly from VLC. At that link, you can either download an installer package, which places the library where it belongs, or download the libdvdcss.2.dylib file directly. If you take the latter option, you need to move that file to /usr/lib/ on your Mac. The installer does that for you.
When I ran the installer, however, it locked up after a few seconds, and I eventually needed to force-quit it. It had in fact installed the library in the proper place, though, so everything turned out okay.
Once that file's in the right place, HandBrake will happily start encoding protected DVDs successfully again, and you can keep on using the latest version of VLC, too.