Welcome to the site.
VirtualDub does not natively open MPEG-2 video, or quite a few other video formats. It's written to natively support only a few AVI based codecs, as well as pull in VfW codecs on the computer (and not Directshow). To open unsupported formats, you need plugins. In this case, the MPEG-2 plugin written by the user "fcchandler". I've attached it to this post for your convenience.
Note that
VirtualDub -- the plain version, even with the MPEG-2 plugin -- may not work correctly in all workflows. VirtualDub has a known and documented issue with proper handling of interlaced MPEG-2 chroma. The workaround is to preload the MPEG-2 with a frontend script in Avisynth (ffvideo source, for example -- never directshowsource), or by simply using one of the custom versions of VirtualDub: VirtualDubMod or VirtualDubMPEG.
The downside is the Mod/MPEG versions are built around old deprecated VDub 1.5 versions. My solution is to load the video in VirtualDubMPEG, save out as
Huffyuv, and then import that to the new VirtualDub versions. It takes more time, more drive space, but neither are a major factor here. The benefit of newer VirtualDub versions are, of course, newer filters like Yadif or 64-bit plugins.
____
Another observation is this:
- Open MPEG-2, VirtualDub improperly damages interlace chroma. Process video as desired (excluding deinterlacing).
- Save it to AVI anyway, ignore problem.
- Open in
MainConcept Reference, encode AVI to MPEG. Problem disappears, MPEG-2 is perfect.
This has yet to be explained -- mostly because so few people involved in the freeware software scene own a $500+ MPEG encoder, and are unable to experiment.
That's why I said "all workflows". Apparently, this specific workflow is unaffected.