Is there an opensource tool to merge videos alongside with encoding. Merge in a sense to merge vcd cd1 and vcd cd2. or to merge different chapters of dvd. can handbrake do this?
VirtualDub would be my recommendation. Just follow the directions here.
Dat files and vob files are both MPEG formats in different container files. If you want to output to mpeg, try AVIdemux. It's more updated.