1) If i append an .avi file to another .avi will i have quality loss ?

2) I've seen the term thread priority (low/normal/high/highest ...) in many programs , including VirtualDub.
What exactly does it mean ?
If i set the thread priority to high will i have fastest file
processing ?

2) How do i know which is the aspect ratio of the DVD i'm decrypting ?

Answers:
1- You will not loose quality,if you do it right.
2- Yes and no.you may gain some speed,but your system may crash.
3-It is whitten on the box of the dvd title.

And which is the right way ?

Lets say i have 2 .avi files created with divx compression.
I open an .avi file and then i append the other .avi using divx compression.
Is that right ?

No - because what you're doing is basically joining two or more avi files with same audio/video bitrates. You might get sync problems but quality has nothing to do with it.

The thread priority tells the OS to tell the processor how high the encoding priority should be. The highest might make your system unstable if you're having hardware-related problems such as insufficient cooling because it is a super-intensive work. Another thing is you wouldn't be able to do multi tasking if you set your thread priority to anything higher than normal. Well you can but even your mouse will move slower than anything.

Same answer as above - but you can also check it by pressing F5 after you load your vob files in DVD2AVI.

I must have missed this post while typing the earlier reply. Anyway, have a look at this link for merging procedures using VDub.