12 Tips for High Quality Screencaps
1. Always pause playback before taking a capture.
2. Quality over Quantity. Take care in selecting your frames. Look for good composition. The internet is a very big place and very few people want to spend all of their online time looking through thousands upon thousands of caps in a single gallery or zip file. After capping, go through your screencaps and weed out the ones that are blurry or are just not very good. If you have several caps that are very similar, choose the one you like the best and delete the others.
3. Set your capping program to save your images in BMP (or PNG) format and then use professional image editing software such as Photoshop or Irfanview to convert to jpg. This gives you control over file size and the amount of compression that is applied to your images. VLC is a great program for capping. The png files it produces are of high quality, however on the jpeg setting, the images are compressed very heavily, compromising quality, particular if the images are small. The image format, GIF, is not suitable for saving screencaps.
4. Don't choose a too lower JPEG compression setting or a too higher one. Choose a quality setting just slightly above that at which JPEG blocking artifacts begin to appear. Photoshop's "save for web" feature is excellent for this - It has a 4-up tab that allows you to view different quality settings and the original side by side and there is a tool that lets you zoom in to see whether there are any artifacts present or not.
Be aware that JPEG compression is not standardized across the web and the quality scales used differ from one program to the next. For example, a quality setting of 8 in one program may only equate to a 6 in Photoshop. Also, in some programs, an image saved at a quality setting of 100 is indistinguishable to the human eye from the same image saved at 90 but the file size can, in some cases, be over twice as big.
5. If the option exists, disable chroma subsampling or select no chroma subsampling when saving your images. 
6. Never crop your JPEG screencaps. JPEG compression is applied in blocks of 8x8 pixels. If you crop, the blocks all have to be realigned during resaving - degrading picture quality. If you must remove black bars from the top and bottom of your DVD caps, crop your Bitmaps and then save as JPEG or you can add a crop process  to your 'Bitmap to JPEG' batch conversion routine.
7. Often screencaps are too dark and benefit from having the picture brightness or levels adjusted slightly. Whether you do this in a video editor before capping or in an image editor after capping, don't be heavy handed making the adjustments since any kind of editing will introduce irregularities and degrade picture quality.
8. Make sure the Aspect Ratio is right! When DVD's are encoded the video is sized and compressed into a format suitable for display on your television screen in adherence to a standard. This "source video" needs to have the width resized for your computer monitor whose pixels are square as opposed to the non-square pixels of your television. Most DVD and Media Players will do this conversion automatically during playback. However, taking a still image capture of your video is not as intuitive and you will need to go into the program settings and make sure the current "window" size is selected and not the "source video" or you will end up with captures that are sized 720x576 - (PAL DV standard) or 720x480 (NTSC DV standard) both of which are of incorrect aspect ratio on a computer monitor. Some correct ratios are:
Full screen: 4:3  1024 x 768, 768 x 576, 640 x 480, 400 x 300
Wide screen: 16:9: 1600 x 900, 1024 x 576, 854 x 480, 800 x 450, 624 x 352
9. When purchasing DVD's choose Widescreen over full screen for better quality. Also be weary of "non-anamorphic" widescreen DVD's - these are DVD's with a widescreen picture but which transfer as full screen (4:3) and have black bars digitally added to the top and the bottom. The picture quality is less sharp and inferior to the anamorphic widescreen release. If you scroll all the way down to the bottom left of this page there is a good illustration of the difference between Anamorphic and Non Anamorphic DVD's.

Often, special editions are made or a movie or television series gets re-released with improvements to picture quality and transfer. It is worthwhile checking on Amazon to see which is the best release before you purchase. This site, DVD Beaver, is well worth checking out. They review and compare the quality of the different releases, both the video and audio as well as reporting on bonus extras. They often show screencaps to demonstrate differences in video quality between different releases.

10. There is no gain in picture definition or sharpness by capping a DVD at a size greater than the resolution height of the source DVD file. Which, for Regions 2 & 4 (PAL) is 576 pixels and for Region 1(NTSC) is 480 pixels. The source resolution is the default size to which your player displays your video when it is first opened. With a very large monitor, capping at full screen merely only stretches the picture, blurring it out slightly- It doesn't make your images "HiRes".
11. If you auto cap, check first for scan lines or interlacing artifacts in your DVD. If present, apply a deinterlacing filter before saving the image sequence. Photoshop has a deinterlacing filter which can be used afterwards instead, but it is not suitable for some types of interlacing.
12. If you enlarge your images, don't resize to the point where they become all pixelated or blurry. Using bicubic interpolation (smoother) should help prevent this.