Hi
From my experience with VLC it goes for the 'default' aspect ratio, and usually gets it right.
If you use a program such as MediaInfo to test one of the VOB files it will tell you which aspect ratio was used when the DVD was recorded.
If you try to get rid of those borders using an incorrect aspect ratio setting it will just 'stretch' the picture and it won't look right.
This is the link for MediaInfo but there are probably other programs that do the same job.
Here:-
http://mediainfo.sourceforge.net/en