That hints that VPs is not seeing the required codec.
Consider installing the FREE, K-Lite codec pak. Although it's overkill, it may do the job, and can be uninstalled. The BASIC version handles TS files...
http://www.codecguid...download_kl.htm
You will see that the STANDARD version includes MPC-HC (Media Player Classic Home Cinema). That's an all-purpose FREE media player.
Even if i is installed standalone (without the codec pak) from http://mpc-hc.org/, it may enable VOB in Videopad.
So, two ways to go...to track this down.