It's funny you posted this -- I spent the better part of an evening last week trying to edit down one of the Kelly Monaco games into a straightforward video. The problem is that the game video files are non-standard MPEG-1 (they have metadata embedded between the clips, so the game .EXE knows where the clips begin and end). This means that when you open the video files (stored on the CD with a .DAT extension) in an MPEG editing program, it chokes after the first clip. VirtualDub (either VDubMod or the MPEG2 hack version) says that it can't identify the file type. If you try passing it to VDub through AVISynth, the audio and video get completely out of sync. I tried Premiere, but it was a jumbled mess. I even tried GraphEdit -- I just couldn't get correct output.
If anyone has any other suggestions, I'm willing to give it another shot.