You can't save movies tot he 360's hard drive unless you bought them on Xbox Live. Regular movie files can only either be played from the DVD or streamed from a USB device. Copying it on your computer would be piracy.
artic_sheets- note the 'rented' part of the question. The person does not own the movie and has no legal right to make a backup. Even if he did, it still doesn't change the fact that you cannot import movie files to the 360.
Copying video files from DVDs and BluRay discs is only piracy if you don't own a copy of the original DVD or Bluray - or if you distribute said copies to other people who didn't pay for them.
Copying video files from DVDs and Blurays that you already own is NOT Piracy - You are permitted by law to keep your original copies of fims i.e. in a safe and pristine condition by creating a valid "backup" - whether that's as an AVI, MKV or a Dual Layered DVD.
If you were to make a valid backup - you would use a DVD ripping program like Magic DVD Ripper, which can circumvent the encryption on the disc and allow you to rip video files in any number of formats - legally