The only mention of .ASS files anywhere is 'ASS I/O' a file compression software for compressing 'multiple' files together.
UMD and ASS is some alternative to UE3's cooking process. That's quite easy to implement way to make seek-free level loading without rewritting full UE2 code.
This game is also similar to Ubisofts 'I Am Alive', both run on Unreal 2.5 and share the same folder hierarchy and file formats.
All Ubisoft's UE games has enough modifications in comparison to previous game (for example, Splinter Cell 4 compared to Splinter Cell 3) so I'd rather suppose formats are quite different. UMD is a wrapper around Unreal's package format. It consists of file chunks, some directory (which helped me to restore original game packages), and they're compressed with XBox360's LZX library (even for PC version!). Encryption is very simple - just XOR'ed all the data with single value.
On 'XeNTAx' (game research forum) people were having just as much trouble decompressing the UMD and ASS files. They were doing it for localization translation.
I've provided my decoder for UMD files to one of Brasilian's localizers and as I know he successfully localaized Splinter Cell: Conviction. But replacing texts and replacing textures are quite different tasks, especially for this game.
I have no idea what Ubisofts problem is but they sure like there files encrypted
As I said, encryption is very simple. Everything else done for optimization.