I remeber doing that with a music video that was a single .vob file.
Inside the structure of a .vob there is usually several streams encapsulated that occupy little space, but I really needed just the .m2v file, so I loaded the .vob and demuxed with the MPEG Tools of TMPGEnc.
By changing the extension you cannot actually change the data within a file, just the way Windows associates to the appropiate program to execute(my friend is a Mac user and find my Windows and his 3 letter extension funny). For example if I try to open a .dat from a VideoCD with Media Player, the video plays because the directshow filter recognize the MPEG header within the file, but is not really a pure MPEG file, it contains extra data for the VCD format. If anybody wants to check this, there is an app called VCDGear 2 that extracts the pure MPEG file within the .dat discarding the padding data and stuff, and you can see after the process that the .mpg is like 8 Mb smaller.