It's possible to do the editing in Sony Vegas Video, but you have to manually set the bitrate to exactly what was used to encode the original mpeg files in the authored DVD - or it will re-encode them. You can use a program like G-Spot to get an idea of what the bitrate of a DVD is, but it's not always truly accurate.
I would recommend a program like Womble's MPEG Video Wizard DVD (
www.womble.com). You can easily edit mpeg files with it, it figures out the original bitrates automatically, and it doesn't re-encode (unless you want it to).
And you can use the previously described method of creating an .iso file and mounting it in a virtual drive, but that can be problematic for a lot of reasons. Why not just reburn the disks and extract the files using DVD Decrypter? Disks cost 20 cents and you can burn them in just a few minutes.
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