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You will probably be best off merging the .vob's, cutting it where you want, then encoding to mp4. It's been a long time since I've done anything like that(never mp4 always xvid). If I can remeber the names of some of the programs I'll post them. But look around on http://www.doom9.org/ I'm sure they have something that will work.
i use instant handbrake which rips straight from dvd to mp4 (H.264) made for the ipod. mac based though, although there is an experimental build for windows available, but i haven't tried it.