How can I transcode a video to DivX without quality loss?

[Ubuntu_user]

Hello,
I'm not a native speaker of englisch, but I'll do my best:

I downloaded a video that has the H264 codec/format and I'm unable to play that file on my DVD player.

I'm looking for a way to be able to watch it on that player, so I have to "transcode" it, I guess.

I already found out, that I can use the streaming feature of vlc to change it into another video format.
What settings and which format are best, considering I want to have as little quality loss as possible and I don't mind a big filesize. (My dvd player can play DivX, by the way).
Which bitrate, etc., audio codec, and so on would you recommend?

Or: Is there any better way to turn my h264 files in to another format?

Thanks for your help in advance,
cheers
U.U.

[Jean-Baptiste Kempf]

Yes, you have to encode to mp4v, and you will loose quality, of course, but increase the bitrate to compensate that.