I hope you mean terabytes instead of gigs as each individual movie ISO is probably 4-7 gigs.
Heh, yep that's what I meant
If you mostly care about the movie rather than the menus/extras, I would recommend ripping to another format - DVDs are not particularly high resolution, and you can maintain the image quality in about a gig a movie or less.
I started off doing that but I stopped for a couple of reasons (it should be noted that the bulk of my collection is TV on DVD so these wouldn't be a big deal if your collection is mainly movies):
1) It takes much, much longer to rip to another format. It takes anywhere from 5-15 minutes for me to rip a DVD to ISO but it takes an hour to mp4 or mkv using recommended settings in Handbrake. So it was already faster to rip first to ISO just to get it on the drive so I could queue up a bunch of files in Handbrake to run for 8-12 hours.
2) This is very particular to using scrapers in XBMC but I found it a pain in the butt to have to assign each individual video file the specific name for it to be scraped properly. Not only was file renaming cumbersome on an episode by episode basis but it took even longer because I had to verify that the Chapter on the DVD I was selecting corresponded to the to episode in question. For some videos it was easy and obvious, for others not so much. Much easier to deal with ISOs where I can just slap all of the episode numbers into the filename so it will work right with scrapers.
3) I initially thought I wouldn't care much about special features (after I can always pull out the DVDs if I really want them). But then I started second guessing myself. So I decided to put commentaries on their if they existed. And I have a fair amount of anime and in those cases I wanted all of the language tracks since sometimes I watch dubs and sometimes subs. Again, it made setting all of it up in Handbrake more cumbersome.
Ultimately I decided that space was cheap enough to just stick with ISOs. Made the whole process much easier.