Easydivx isn't the right tool here. That's a freeware divx converter, nothing to do with quality enhancement, filtering, restoring video. I've never even heard of it, so I doubt it's good for encoding anyway. I downloaded it, took a look at it -- Easydivx looks to be a really old and poorly coded software.
Windows Media Player is honestly a terrible software video player. VLC is a much better choice, for a number of reasons -- if nothing else, it uses an internalized codec system to help you "play anything". Get it from http://www.videolan.org/vlc/
To get the video off the DVD, use this method: http://www.digitalfaq.com/guides/video/edit-dvd-recorder.htm
If this is a commercial DVD, you may need more advanced methods (including decryption), depending on what it is. many retail DVDs have "extra stuff" in the video streams, such as multiple audio and subtitles, which demands special extraction methods. Read about that more here: http://www.digitalfaq.com/guides/video/edit-dvd.htm
After you do that, you'll have the audio and video on your computer, and you can further edit or restore in VirtualDub
What you do in VirtualDub
largely depends on what you have to work with, and what's wrong with it. I'd have to see example to suggest more.