You could try Flip4Mac in combination with MPEG Streamclip, but that might not get rid of the watermark, even VLC will leave it if you use the the "Streaming/Transcode" wizard. The might be no way around paying for Flip4Mac Pro maybe.
Is it really this complicated to do? Is there anything I can do on the PC (As in the computer in which I got the original file from) to make the file a MPEG file without doing any converting... this is absolutely frustrating to deal with.