| In the future, when everyone has way too much bandwidth on their hands, these'll be getting passed around on the 'net. Everyone'll also have 6 terabyte hard drives by then too. No one'll bother ripping to DivX or MPEG. They'll just drag their copy of Mission Impossible 3 DVD onto their ICQ client, and eagerly await the copy of Star Wars Episode 2 due in return.
I'll leave the explaining to someone who knows about the structure of DVDs. AFAIK tho, they contain the various media formats used by the DVD (MPEG-2 and AC-3 streams, subtitle tracks, etc)
DVDs contain several titles, and each title is made up of several segments. .VOB files are named as VTS_xx_y.VOB, where xx is the title number, and y is the segment number. | 
