There are so many output formats to choose from. Which one is better?

Different formats are better for different purpose. So the answer really depends on how you want to use the extracted audio.

• If you want to playback them on your computer, OGG Vorbis is highly recommended. It can provide better quality and compressing rate than MP3 and support 5.1 Surround mode.
• If you want to listen them on your portable MP3 player, then you certainly want to use MP3 format. (Unless your MP3 player can also play OGG files. In which case OGG is again recommended.)
• If you want to reuse the extracted audio, like edit it or convert to other format, then you should use the PCM uncompressed Wave format.
• If your system supports it, you can use FLAC format over PCM uncompressed Wave to save space and get around the 4G size limit.
• Direct Demux is the choice if you want to get exactly the same audio as it is on the DVD.
• If you want to create an Audio CD from the DVD, simply use the CD Image and Cuesheet mode or see more details at the answer to next question.