I don’t use handbrake but I’ve had success with ripping DVDs with the H.264 codec:
Video bitrate: 1000 kbps
Audio bitate: 128kbps (AAC)
Resolution: 640×480 (for both PAL and NTSC DVDs)
I moved from Xvid 1200kbps to H264 1000kbps and as H.264 has a better compression agorithm, you can get comparable quality with lower bitrates
If the audio is out of sync, you may need to check on this forum if the codec/resolution etc. combinations you are using are supported by Wiimc. If they are, try options like ‘don’t drop frames’ or ‘allow duplicate frames’ if Handbrake supports these.
Hope that helps, good luck!