I can recommend Auto Gordian Knot (AutoGK). It is an easy to use front end to a suite of pgms used for the various stages of encoding... I've been using an older version for a while now and it is so simple to use as to be almost foolproof, and has encoded DivX files for me which play back on the DVP642 fine.
Usually takes around 3-4 hours (XP1800+ 256mb ram) to do a 2 pass DivX which maintains excellent quality on even a single 700mb CDR. I just read that XVid codec may be a bit quicker so I'll try that next time. It has an option to turn off the PC once finished so you can set it going at night and forget it.
or google for AutoGK and you will find lots of guides to its use.
A warning, the latest beta release 1.84 apparently has some minor spyware in it - see http://www.doom9.org/index.html?/autogk.htm
for info/removal instructions. Earlier versions (which I'm using) do not have the spyware (inc the latest stable release).
By the way - since you have a DVP642 you may be interested in http://groups.yahoo.com/group/philips_dvp642/