My capture card records in MPEG (un-editable) format as well. I use MPEG Streamclip to convert the files to an editable format.
http://www.squared5.com
It's free, and it's retartedly simple to use. You can convert any MPG or MPEG file into MOV, DV, AVI, MPEG-4, or WMV format. However, it is highly illeagal from what I've heard, but I've never heard of anybody getting busted for using it.