If you still having problems then you can try this Handy conversion program .My workflow for getting vob files to FCP is like this, I demux the vob to a m2v with accompanying audio file the I use mpeg streamclip to export the m2v file using the Final Cut unscaled option, this way you are not recompressing the footage and degrading the quality further. Heres a link also to a cut down manual for Final Cut Pro 5, a lot of the stuff is the same FCP Manual hope this helps.