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Tried Mpeg2Schnitt on my MPEG-2 files, but Mpeg2Schnitt says format not supported. Perhaps it's because they are PAL (I'm in Australia).
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Mpeg2Schnitt supports PAL. But instead of loading the .mpg-file you must demux it into one video file (.m2v or .mpv) and one audio file (.mp2 or .mpa). Just renaming the .mpg-file to .m2v and then load the audio won't work. You can demux your .mpg-file with TMPGEnc.