Don't worry about the guides for something like this. The simplest way would be to use VirtualDub to load in the originals, use a resize filter to trim it do a PPC screen size, select Divx codec's quality setting (I find anything between 180-250 suitable for PPC) and re-encode the video. Since you're re-encoding divx content, you may see a few small artifacts, but it shouldn't be too noticeable. There are other ways, but this should be pretty simple and produce decent quality results.
Oh, and use PocketDivx player to play them..
