I created a home movie from Pinnacle version 8 and placed it on DVD. I has an error in it, A hiccup and plays a wrong peice of footage at the wrong time. I deleted all the avi and DVD files from my hard drive. I wanted to re-edit this info without starting from scratch. Is there a pinnacle program or another software solution that will edit existing DVDs or transfer it back to AVI format in order to edit it again on Pinnacle studio 8 in order to create a new DVD??

Yes - extract the VOB's with DVD Decrypter and then use TMPGenc.