Never had a *.dat file so only guessing... Wiki article on video file formats says "MPEG-1 is found in a .DAT file on a video CD". There is a chance simply renaming your *.dat to *.mpg might do the trick.
As to program comparisons... Does xilisoft videoconverter ultimate do straight forward chroma keying, alpha channel overlays, key frame animation, mixing of multiple (99 in some versions) audio and video tracks, and lots more?