I am now using a WIN7 computer with VLC version 2.0.5 attempting the same conversions, same settings. I select "Media...Convert/Save..." I "Add" the mpg file in the first dialogue box, then select "Convert/Save" to enter the path and filename of the MP4 file as the "Destination File". Profile is H.264 + AAC(MP4), with no deinterlacing or raw data dump. Then I select "Start".
This is the same process I have used for years in the prior version. This is different in version 2.0.5: On Start, the counter at the bottom right runs faster than in the prior version and VLC indicates that the video is "streaming". Once it gets to the the end of the counter, it starts the process again, and again, and again... I let it run for 3 days once just for curiosity.
From Windows Explorer, I see that the file is being built as the streaming is in process; however, the file size returns to Zero when it loops.
![Sad :(](./images/smilies/icon_sad.gif)
Someone please tell me I am missing a simple toggle, or tell me where I can get earlier versions of VLC.