I would use VirtualDub to open the .mpg video file, then go File > Save Wav... to extract the audio. Step two would be to use dbpowerAMP 10 to convert from wav to mp3.

I've recently picked up some .mpg files, and found, to my dismay, that I cannot play them. When I try to open them, I get the message (from Windows Media Player) "No combination of filters could be ...