You don't even need to convert it to AVI. Just use something like avisynth or virtualdubmod to load the vob file, and then use the WMV9 encoder. Basically the process is exactly the same as using Xvid ...

If you’ve ever tried to share or play an old WMV video and faced compatibility issues, you’re not alone. WMV (Windows Media Video) was once a popular video format, especially for Windows users, but it ...