Well looks like this thread has been dead for a bit but figured I'd give my input.
I first discovered this way back in August of 2000 while working on my blue sub video. The problem is that
DirectShow filters are not frame accurate. From the AVISynth beta docs that old Ben Rudriak-Gould wrote conercing DirectShowSource:
DirectShow video decoders are not required to support frame-accurate seeking, and most don't. As long as you just read a portion of the video sequentially you should be fine, but heaven help you if you want to do anything more complicated. This limitation doesn't apply to AVI files, or to any other format for which there's a frame-accurate DirectShow decoder.
Suffice it to say there is not a single MPEG2 playback filter I've found that is frame accurate. Thus it is
useless for editing. For Converting it works fine - in fact using DirectShowSource in an AVS file and then opening it in VDub to convert to Huffyuv works fine - although I find DVD2AVI gives better video quality at the sacrifice of speed.