DTV .mpeg files won't play on VLC

[sidney20]

Operating system windows XP sp2 (compaq pressaio)
VLC version 1.1.1 (also tried this on VLC 0.9.9 which produced a picture but no sound)
Hardware (Freecom DTV USB stick)

HI,
I can record from my Digital TV usb stick into mpeg2 files using the freecom software provided with the stick (saved to harddisk).
These playback just fine using the software that came with the DVT stick, and on my DVD player software, but not on VLC player - the screen resizes to the correct size, but produces only a black screen with some (quiet) audio, and occasionally some distorted vertical green stripes.

Vlc player plays other videos files ok (including other mpegs ripped from dvds etc).

There are no error messages produced.

The files have the extension .mpg.

Any idear what the problem is?
Does VLC player support this type of file?