As many TV stations start to broadcast MPEG2 HDTV movies these days from time to time one of those MPEG2 HDTV movies is stored on a local harddisk. These harddisk recorders store the data normally in so called “MPEG2 transport streams (TS)”. Since these transport streams contain several more information beside the MPEG2 video+audio data you need to get rid of those extra informations before you can transcode/reencode the MPEG2 to something like MPEG4.
A great tool for that purpose is HDTVtoMPEG2 – it converts the transport stream into a usable and reencodeable MPEG2 movie file. From that point you can use the commonly known tools (like Virtual Dub MPEG2) to convert to MPEG4 for example.
Source 1: http://www.eecs.umich.edu/~balazer/HDTVtoMPEG2/index.html
Source 2: http://fcchandler.home.comcast.net/stable/