All right, this is for the benefit of any other want to be Mac Fan editor who gets stuck and searches this form in the future.
As of Now:
The best way I've Found is to Rip the DVD you want to edit with Mac the Ripper on to your hard drive. After that, get apple's Mpeg Codec ($20,
http://www.apple.com). Drag the VOB file into final cut and render.
Then open up the VOB File with Mpeg Stream Clip, and demux to get the AC3 file.
Now EDIT AWAY!
After I figure out the best way to export and make a DVD, I'd be happy to re post again.