If you are converting a commercial DVD 5.1 soundtrack to 2.0, they usually have both soundtracks to begin with. You are better off using the existing 2.0 (which may be PCM) rather than simply converting the 5.1 to 2.0. From what I've read about it, it's actually kind of a tricky process, as you don't want the other speakers to overwhelm the dialogue.

Otherwise, you could just hook up your DVD analog stereo audio outputs to the input of your soundcard, and let the player downmix the 5.1 for you (as it and the soundtrack were designed to do.)

As to the video conversion, the best way would be to convert the MPEG to AVI first, and then use the video editor of your choice. I don't think you can just change the IFO files, because people were trying to do this with the ROTS rip and while it *did* make the picture more presentable, it still wasn't the correct aspect ratio.

Of course, I've not used every single program out there, so I won't say it's impossible.