“I’ve been asked to do this because of time and money.”
Find a polite way to tell the client that, given the circumstances, you’ll do the best job you possibly can for them and leave it at that.
Unless they’re technically knowledgeable, odds are that the client won’t even notice the very slight quality loss.
“The original editor wants like 12 hours pay to do this…”
12 hours to trim an outdated pricing tag?
If they still had the original project & files (which, if they’re a pro outfit, they would), this should be a 2 hr. job., 3 at the most.
I say this without knowing anything about the job but 12 hr.?
No way.
“My biggest concern in using their DVD is how big a quality hit are we talking about?”
I’ve done this before with videos I’ve created and haven’t noticed much of a quality hit BUT this is with my own work that I know the quality of as well as the bitrate used to author the original DVD.
“I do not want this looking fuzzy on a 42″ LCD at a show.”
Try taking a short project you’ve done, do exactly what I described and see what you think.
You have the advantage of being able to see the difference between the two, I don’t, so trust your eyes.
“If they have a large avi file they can get it to me via You Send It.”
If it’s an AVI of the original project then yes, this would be the ideal material to work with.
Your biggest problem is that you have no way of knowing until you get it if Vegas will be able to open it or not.
Hence my suggestion to re-edit the original DVD still stands.
Good luck with the project.