I think that you misunderstand the program and the nature of DVD video. If you set DVD Shrink to DVD9 output, there will be no compression applied. In settings smaller than DVD9, it applies compression to shrink the file size (provided that the file size of the DVD is larger than the selected target size), which does lessen video quality, but doesn't change the aspect ratio or distort the image. A lot of the time, DVD images are
anamorphic (because the DVD format doesn't support true widescreen video - 16:9 images have to be converted to 4:3), which means that they are already "squished" on the disc and depend on software to "unsquish" them during playback. Sometimes, ripping the disc (such as with DVD Shrink) causes the resulting file on your hard drive to play "squished" rather than signaling your software to adjust the aspect ratio. This is not a problem if you simply set your video playback or editing software to adjust the aspect ratio to what it needs to be.
Also keep in mind that there is an option within DVD Shrink to either split the video files into 1 GB chunks or leave them in one piece. If you are ripping a disc in order to make a fanedit, always uncheck the setting to split the files.