Womble will not do the soft transitions. That is it's biggest drawback. My edit does not have them. I could do them in Vegas with the knowledge I now have, but it's not worth it to redo the whole thing for a few wipes for me. You, however, could use Vegas to just create the shots with wipes, encode those to M2V format, then splice those tidbits in where they belong. You'll have to do some precise measurements with your frames when you do it though.

As for your AC3, you need to demux the individual streams from each other when ripping.