You need to store your movie in a ogm or matroska container. To do this download a program called ChaperXtractor and get the chapters from the ifo. If you want to use ogm then download virtualdubmod and input the file under streams > video chapters. To playback you will need the OggDS found at
http://tobias.everwicked.com if you want to create a matroska file then use mkvmerge to create it
http://www.bunkus.org/videotools/mkvtoolni...c/mkvmerge.html it should explain how do to this in the readme. For playback use gabest's wonderful matroskasplitter found here,
http://sourceforge.net/projects/guliverkli/ oh yeah and you will need a player capable of putting these chapters in a menu so you can switch chapters (at least for matroska), I recommend mpc also found on gabest's site.