I have a similar problem the last few days when trying to edit DVD footage. The problem was that when the VOB was converted it made it an avi with a xvid codec which makes it really impossible to edit b/c of the problems you’ve said. What I did ( this is sad) was take the converted file and brought them into Windows MOvie Maker b/c they run fine in there and export them from the uncompressed to avi and now the footag eis fine in premiere. Or try mpgegstreamclip like someone else said. I couldn’t find a free program that did this.