I've used it to extract portions of a DVD, not something I'm forced to do very often though. Rendering is as fast as your PC. A bit slower from mpg-2 of course.
If you want a good cheap native mpeg-2 editor I've tried Womble once and it worked as advertised and others here give it a good rap.
You can extract and edit, and at very good speed, using DGIndex to create a proxy file (takes about 3 minutes on my old 2.8 GHz P4) and then VFAPI to create an AVI proxy from that (takes less than 2 seconds). You then put this proxy AVI on the timeline, and Vegas will edit the file with the same speed as a DV AVI file. For sound, you can usually put the VOB file on a track below the AVI, and once you have everything lined up, delete the VOB video track. Thus, you use the audio directly from the VOB and the video from the AVI.
Of course, unlike Womble or VideoRedo, any edits you make will be lossy, because Vegas will recompress to whatever format you are going to use for your output.
However, the final step, if you really want a great workflow, is to take the edits you created using the above steps, and then use the Vegas to Womble script and let Womble do the cuts. If your goal is to go back to DVD, then your cuts will be lossless and the result will have the same quality and fidelity as the original.
So, in summary, with this workflow, you get the speed and excellence of Vegas editing, with the lossless cutting of Womble..
Finally in answer to your original question as it was phrased (although it may not have been what you really meant to ask), the best general purpose video converter is Total Video Converter.