I had exactly the same frustrating experience as you! A friend asked me if I could put the soundtrack of her music DVD onto CD to play on portable CD player.
I am reasonably experienced with DCD Decrypter, but in ISO mode, so found and followed the guide on here: "DVD Video to Audio CD Guide". After battling for 2 days and only getting VOB files (no AC3) I found a reference somewhere else which solved the problem.
The guide shows the video stream is unselected and says: "3. Once done, uncheck all boxes except one audio track". But this doesn't work as you just get VOB files.
In the Stream Processing tab you also have to have the video stream enabled AS WELL as the audio one that you want to extract. You can leave it in the Direct Stream Copy mode, but as the guide shows, you need to highlight the audio stream and set it to Demux mode.
As per the guide I set File Splitting to Chapter and in a few minutes had all the AC3 files, one for each chapter which also corresponded to one music track on the DVD. Quality was perfect. I did try some other rippers which produced WAV files but found the quality unacceptable (mainly base and percussion distortion). I then used Nero 6 to create a Audio CD compilation. The guide gives comprehensive instructions. However my version needed the AC3 plugin before it would add AC3 files (URL is in guide).
I think this shows how no matter how good the guide, we all see things from slightly different angles. I am in IT support and no matter how much time and trouble I go to with my support guides some users still get it wrong - normally because I assumed something, and/or they assumed something else!
Since this thread has been quiet for a week maybe you found your answer already, but I am posting since I found people with similar problems elsewhere and this might help them. Perhaps the guide author might like to make a small addition to his guide about this?