I don't thing that VirtualDub support MPEG2 format. You can find everything you need on this field on "www.doom9.net" site. As a suggestion I will recommend you to use "XMPEG 4.2a" which is a complete and easy program to use. Of course you will need a codec as well. "DivX 4.11" is the best solution. Good luck
TMPGEnc will do the job for sure. It's not fast but will do the trick. Check www.vcdhelp.com for instructions and other software that can handle similar tasks.
Nevermind, I guess you already checked www.vcdhelp.com. Also I was wrong saying that TMPGEnc will do the job. I thought it did somehow but I just checked it w/ a MPEG2 file and no go....
Sorry for keep coming back but I think I've found a solution. Try Roxio's Video Pack 5. I just tried it and it supports MPEG2 and conversion to AVI. It's kind of expensive though (~$500).
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