I already have the Video_TS folder which isn't copy protected, I just don't know what settings in MPEG Streamclip or another app to use to get the files without any loss of quality. I want to preserve the widescreen 480p aspect ratio and the 5.1 surround. I want to edit in FCP and have all the surround channels to be seperate audio tracks rather than there being only 2 audio tracks. Is this possible?
For a lossless codec, I would recommend SheerVideo. It costs money, unfortunately there isn't anything free like HuffYUV on the Mac. I've edited both of my Story Of projects using the PhotoJPEG codec at full quality in FCP with excellent results. I would just google for a mac program that can extract your 5.1 file into separate files to use in FCP. I know one exists and have actually done it before, just can't remember right now. Good luck.