Is the purpose of Movie Shrink & Burn 2 simply a way to compress and store/archive movie files -- or can you actually play the compressed CD/DVD output files?
I didn't read the whole description of it, but what I got from it was that it will shrink the size of a DVD (the .VOB files) which is something DVDShrink already does and has been doing for ages and completely for free. It will also accept an already compressed movie and transcode it into a smaller movie to allow it to fit on a CD-R, note that transcoding already compressed movie files can introduce visually noticeable artifacts, it isn't too different from for example encoding an MP3 to another MP3 - the resulting quality is gonna suck.
Sorry but it seems worthless if you ask me as DVD-R and DVD+R discs aren't that expensive so putting a movie on them would be my choice. Also many xViD and DivX movies can be compressed somewhat precisely to fit on a 700 MB CD-R using FairUse Wizard (Last Freeware Uncrippled Version). It's slower than hell to compress video, which I why I prefer to just backup my DVD's to another DVD which usually requires DVDShrink since most DVD releases are on double-layer discs now. By using DVD Video you can of course play it on any computer with a DVD drive so long as a DVD Video decoder is installed such as one included with K-Lite Mega Codec Pack, and in most modern DVD players.
Please don't ask how to use the software I've listed above, there's many finely written tutorials online that already detail such better than I could explain it.
These are only two tutorial's, there's more available via a Google search: