I tried to copy a vcd just by copying the avseq01.dat and other .dat files, but I was getting an I/O error. So I found out that I have to install a program called CDFS. You can download it from here.
Next, I unzipped the folder, used "make" and "make install". I had to do an additional step: sudo insmod cdfs.ko This is to activate the filesystem. See the INSTALL file for more details.
Now I mounted the VCD, not using iso9660, but cdfs, like this: sudo mount -t cdfs /dev/dvd /media/cdrom
Now when I browse the /media/cdrom folder, I can see the vcd tracks as mpeg files. All I have to do is copy them. Its taking a long time, but its working...
Apparently, CDFS has a lot of other uses, like copying data from corrupt multisession disks. Get more info from this site.
Update: 05 August 2006: Easier solution:
Just get vcdimager and use vcdxrip :)