• The video formats it supports are: .M4V, .MP4, and .MOV
• The audio formats it supports are: AAC, MP3, WAV, and AIFF

So If you want to put your own videos on iPhone and extract audio from videos to iPhone, you need to convert video to the formats that compatible with iPhone. This is a tutorial on how to convert video to iPhone video and iPhone audio on Mac OS X (Leopard & Snow Leopard).

Blow away any previous tools and software you might have installed that you don't need and you think might conflict with getting a good DVD rip. Also blow away any old media files you don't need. This process is fairly heavy on resources so generally the more room you have and the less things that can get in the way, the better.

Software you need:

1. iSkysoft DVD Ripper for Mac (Only $39.00 - Has a Free Trial!) iSkysoft DVD Ripper for Mac is a powerful DVD to iPhone Mac software that can rip DVDs to iPhone format with super high quality. It can rip DVD to MP4 format that compatible with iPhone on Mac. It can also extract audio from DVD and then convert to iPhone audio format files such as AAC, MP3.
2. iTunes (free download)

1Install and Run DVD Ripper for Mac

You can download it for free here:
Intel Version
PowerPC Version

To install it, simply mount the .dmg archive by double-clicking it, and copy the application to your applications folder (or wherever you want it).

2Load DVD movies

Insert your DVD movie into your DVD drive .Click the Load DVD button (Or click the Load IFO button) to load your DVD.

3Convert DVD to iPhone on Mac OS X

If you want to rip DVD to iPhone format, you need to select the output format as iPhone video MPEG-4 (*MP4).

If you want to extract audio from DVD to iPhone, you need to select the output format as AAC or MP3.

You can learn more: How to edit, crop, trim DVD clips and capture pictures on Mac OS X ?

4Transfer converted DVD to iPhone on Mac

Connect your iPhone and start iTunes. Find the file you made above and drag it onto your iPhone.

Click add file to library

Open the file in iTunes. Go to video source on top left menu just beneath library.

It won't be on your iPhone until you sync - make sure you have the movies box checked in your iPhone preferences.

That's it. Enjoy!