Ratdvd re-encodes mpeg2 video into a proprietary video codec. It is not magic. It's very similar to xivd in many ways but (imo) not as good a codec. Use this on a fan preservation which is already an edited version of a dvd or even a laserdisc capture and the quality will suffer.
The only advantage of ratdvd over doing an xvid encode (or similar) is to maintain dvd menu navigation. It is not a superior codec to xvid or x.264.
Many fan preservations already create smaller xvid encodes for download. These are better quality than Ratdvd re-compressions.
Xvid is cross-platform, Ratdvd is not. Ratdvd distributions will only work on windows. Xvid can work on Windows, Mac, Linux and a large number of other devices.
So while Ratdvd might be fine for studio dvds if you do not mind the loss in quality, I don't see it offering any substantial benefit for a preservation or fan edit project in terms of quality when compared to other simpler distribution tecniques such as xvid encodes. The benefits of features are potentially outweighed by the proprietary nature of the format and I personally would not restrict who could see it by choosing a windows-only format.