From my experience the AMV converter will not convert the VOB, the AMV program can't convert all files, i have tried xvid, rm, mv4 and some avi that did not convert, i just got the error message.
I had to use other programs to convert them into normal avi files, which i then could convert to AMV files. I would recommended using virtualdub or tmpeginc to convert them, also
www.vcdhelp.com has a lot of step by step guides on how to convert various video formats using particular software.