First, open DVD Shrink.
Click on ''Edit'', ''Preferences'', ''Output Files''.
Uncheck the line: Split VOB files into 1GB size chunks (recommended).
Be careful; if you have the intention to edit a DVD with DVD Shrink and burn it after, be sure the check the line gain!
When you rip the DVD, do not select ''ISO Image File''. ''Hard Disk Folder'' instead.
When the rip is done, check in the folder. A VOB file is created, a huge one usually (not splitted in 1GB).
Maybe Pinnacle will be able to handle it, I don't know. Try it. If not, you need to ''demultiplex'' the VOB with a free program like VobEdit.
Check here: http://www.videohelp.com/tools?tool=132
In fact, you want to edit a MPEG file. I give you a suggestion...