OH how about that, there's a windows version also. I think it started out as a mac program. MPeg Streamclip http://www.squared5.com/

It will open VOB files directly & you can edit or join them as you please. You can also export to most formats depending upon which codecs you have installed I think.

ie: after extracting the video from Disk, you should use MPeg Streamclip, not shrink it 1st or else you are dropping quality of video without any need to. One method would be to export to quicktime video (uncompressed lossless video) & then use DivX to reduce to whatever size desired.