I opened WMM on my Vista partition, (its not a program I use), and tried to import a dvd from an unencrypted disk. I was not able to get the Video_TS folder imported, but individual vob files can be imported if you hit the option to see “All files” when you browse for a file.
This may not be the best option however, since vob files can split the video in odd places. I’d probably try ripping the entire disk to the hard drive, then remove the mpeg2 video from the vob container files using Vob2Mpg. It is free to use and will not degrade the quality of the video. Found here: http://www.videohelp.com/tools/VOB2MPG
The output from Vob2Mpeg will be one mpeg2 file that you can import into WMM and edit as you see fit.
Once you are done importing all the various videos and have edited, you can use the resulting video in Windows DVD Maker if you want. It is fairly primitive as dvd authoring programs go, but it is free and included in Vista. DVD Maker would not be my first choice by the way.
The output from WMM will either be a DV AVI or .wmv file depending what you select. You could convert either of them to dvd in DVDFlick, or FAVC or AVStoDVD if you would prefer using them to Windows DVD Maker. All three of those programs are free to download and use.
The hard part is getting a free editor. I’d rather point you to a free one that won’t change formats on you and make you reencode, but there isn’t much that works with the mpeg2 found in dvds, not for free. T0nee1 pointed out a few alternatives, but they are not full fledged editing programs.