The capacity of the USB flash drive you need to store your DVD collection depends on the size of each movie. A standard single-layer DVD can hold up to 4.7 GB, while a dual-layer DVD can store up to 8.5 GB.
If we assume that most movies are around 2 hours long and encoded with good quality at about 1-2GB per movie, a 128GB USB flash drive could hold approximately between 64 and 128 movies. However, this is an estimate; actual storage may vary based upon the specific file sizes.
As for format, it depends on what device you plan on using to play these files:
FAT32: This is compatible with almost all systems but has a file size limit of only 4GB.
NTFS: Works well with Windows systems and supports large files but might not work perfectly with other operating systems like macOS without additional software.
exFAT: This works well across both Windows and macOS systems and supports large files as well.
So if you're planning on storing full DVDs (as ISOs or Video_TS folders) which are larger than 4GB in size, then choosing NTFS or exFAT would be better options than FAT32.