VCDs are in an mpeg format. They are compressed when you are making a vcd, that is how several hours worth of video can fit on them.
I am not sure how exactly you would make the vcd if you can't extract the video files in the first place but to try and edit an mpeg...well it works but it won't look pretty.
If you choose to capture, you run the dvds off your dvd player, use a video capture card, and depending on the card you use...footage can look ok but it's not going to be rip quality. I make my amvs using a capture card and send high quality versions to cons, so this is fine. But it's going to cost you extra...assuming you don't already have one. I assume not
The other thing you can do is go to google, type in your dvd-rom drive type and look for forums and help related to the drives. It may be a problem with them and if other people have it...maybe you can learn something that'll help you fix the problem.