The MDS file contains your layer break information, DVD Shrink doesn't produce one but Imgburn in build mode does. This information, if choosing the MDS file, tell your burner how to burn the image and where to place the layer break.
Why wouldn't it?
As for the ripping, Imgburn will not and can not take anything from a protected source and put it onto your HDD. And you won't get any sermons from me as I and many others here feel the same as you regarding your purchases, but due to the circumstances surrounding LUK's last venture discussions of such ripping are taboo on this forum.
EDIT: aaarg, beat to the punch. Cheers vovlo