Convert MSDVD to MP4
Can I convert .msdvd files to .mp4 format?
How to convert msdvd to mp4 file
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Converting Windows DVD Maker Project Files directly to MPEG-4 Videos (.msdvd to .mp4 conversion) is, per se, not possible, at least not without a small workaround.
Use the Windows Movie Maker, which allows users to export their MSDVD projects in WMV format. You can then easily convert WMV to MP4.