My friend Mike told me this was possible, but I didn’t believe it until I tried it myself.
We all know that FCP Studio 2 has that fancy Multi-Format timeline, allowing you to mix and match various codecs, frame sizes and frame rates. But did you realize that you can drag and drop a video TS folder directly into the timeline and actually play the video?
You can also drag and drop it into the browser window, and although you will get an error saying that the files were not recognized, you’ll end up with a folder with all of the .vob files. From there you can load them into the viewer and edit with them. Even the DVD menu items are available.