Heck... How low did this went when I must reply to my own threads.
Milad is wrong. I've found a way (quite a long time ago, but now I'm posting this in hope that I will spare some other people the trouble).
On some messageboard i've found someone who said that "Ace Mega Codecs Pack" should solve the problem - and I tried it. He was right - now I can convert VOB files directly with my MP4 converters.
The codec pack program is kind of stupid though - because when you install what he suggests as a replacement for your existing codecs (newer versions of e.g. MPEG codecs) if you uninstal it you no longer have some codecs you've had before. (and there are some other problems; so install manualy only components that have VOB or DVD in their name and nothing else)
I think the solution has to do with DirectVobSub specifically, so try downloading only that codec...http://www.free-codecs.com/download/DirectVobSub.htm
...Hope I helped someone...