I've downloaded A NON-COPYRIGHTED VIDEO which comes as 2 DVD discs in IMG format (4 gigs each). I'd like to know if I can write an AVS script to convert these DVDs to KVCDx3's as I don't have a DVD burner. Will DVD2AVI read these files?

Maybe you could mount the images to a virtual drive (Daemon Tools, Alcohol 120%) ?

I did try that but Daemon Tools does not support IMG files. However I was able to open them with WinImage and used it to extract an AUDIO_TS and VIDEO_TS folder. I loaded up a VOB file in DVD2AVI, turned on Force Film, and was able to save a D2V file and an AC3 file. Each file is about 90 min long but for some reason when I'm doing my file prediction I can only get a CQ of 56! I don't know what I'm doing wrong because I use the same AVS file I've used many times before for other files of even longer movies and can usually get a CQ in the 70s or 80s. Any ideas what I'm doing wrong?

Well, different movies compress differently. If your source material is full screen, it will get a lower CQ value than a widescreen clip would.