Converting .mpg file to be uploaded in to itunes/ipod

my sister has made me a video complete with music and has saved it in .mpg format.

i cant open the file in any oter programme on my mac except for VLC authough by its little icon it appears to be in quicktime format.

i want to upload this movie to itunes and then onto my ipod but when i try it does nothing… no warning msg’d or anything.

do i need a special program to covert files or make them recognisable to itunes??

would love some advice!
thanks

If Handbrake can open it, you can convert to a format compatible for you ipod.
http://handbrake.fr/