In my experience, DivX under Linux is a complete nightmare.
I tried absolutely everything to rip dvd's under Linux, but was so disappointed in the inferior quality results using dvd::rip and mencoder that I installed my old Gordian Knot under a VMWare guest machine and happily encoded in fully optimized XviD.
Now, about your problem. There are several pieces of software that claim to "convert" from one movie file format to another, BUT, they are generally all GUI frontends to programs like mencoder or transcode which actually do the encoding, albeit only from a command line. Now, the trouble here is two things.
First of all, you'll need to download all your codec libraries and set them up. THEN you need to pray that the frontend actually works with the installed versions of transcode and mencoder. If not, ask yourself again why you use Linux. Just Kidding. X-)
Okay heres what to do:
Install ALL Win32 codec packages. and all popular Linux libraries (libmpeg2 etc.)
Install mplayer which includes mencoder.
Install transcode.
Now pick a GUI frontend. Many are available, I suggest browsing tucows and picking one out.
The above mentioned packages may be found for your distro in the form of RPMs at
http://rpm.pbone.org
Don't bother attempting to compile the source, it's a waste of time, trust me.
Now, if the stuff works flawlessly (by some miracle), select your movie as input and select "XviD" as output codec. Sorry; you're gonna have to wait a while. It's just not possible to lower the bitrate and size of a DivX movie without reencoding.
Good Luck!!
Mark