As mentioned by earlier posters - yes it's a vcd (video cd). that's different from a dvd in that, well, it comes on a cd rather than a dvd. furthermore, and more to the point, the encoding format is different between the two. the vob error you specify is predictable - .vob's are unique to dvds, .dat's are the vcd equivalent: as such the vob error signifies it will only operate on dvd's.
vlc crashing is not necessarily the fault of the disc, it is very possible the version of vlc you are using has a bug in its vcd decoder.
regardless, the actual files you're looking for, the video containers themselves are the 2 .dat files. the size appears small yes, but for a short montage thats about right.
double clicking the .dat files should cause them to open in vlc, it should play them back just fine. copy them to your desktop first if you're worried about disc errors - if they copy successfully the disc is fine.
lastly, it should be possible to convert the .dat files to a more modern, and simultaneously desirable, format. unfortunately since the format is so archaic i don't have any around to test with but give the following a try:
1) try downloading Perian. it's a plugin that expands the range of formats quicktime player can understand. once you've done that try to open the files in quicktime. if you can play them you should be able to export them from within quicktime.
2) i believe you tried handbrake to little avail, but i imagine you tried to feed handbrake the entire vcd. try feeding it the .dat files alone. i'm not sure if handbrake uses quicktime or vlc for it's decoding (or even both) so make sure you've got the latest version of vlc for all of this.
good luck!