Although I work in DVD production, with MPEG-2-specific encoding/authoring equipment and software, a lot of our projects are requests for VCD’s and plain MPEG-1 and AVI files. Since MPEG-2 is relatively new on the digital video scene, and with the DVD industry as protective as it is, the format tends to be rather hostile toward any attempt at conversion or translation. So it’s tough work, doing that kind of conversion when your gear can only handle MPEG-2 encoding and DVD authoring.
Fortunately, I found an excellent resource of how-to’s and freeware gems on
VCD-Helper VideoHelp., to convert DVD and MPEG-2 video to AVI and VCD-compliant MPEG-1 format with minimum fuss.
Update: The site has now moved to VideoHelp. Adjust your bookmarks accordingly.