I would say use dr.divx, thats what I use for most of my conversion needs. you can get a 15 day free trial of it at divx.com. but it is a quite useful program, so i bought it, it really does a great job with VOB files
Make sure you get the latest version though. I heard ages ago from an early version of the program that it didnt' work with Windows XP Service Pack 2, and caused issues, though this was fixed in the new versions
So make sure you download from the official site if you get it