Yes, you should be able to copy and paste the mpeg files and save them in another location without affecting them.
I haven’t seen a thumbnail option in the menu controls. I’m a bit reluctant to add another program to your inventory, since you’ve just become familiar with this one, but AVStoDVD can take the mpeg files you cut out using VideoReDo and build a dvd for you that will include thumbnails.
AVStoDVD is free to use, and it won’t re-encode video or audio that is already compliant to dvd specifications. Set up the program to make NTSC compliant dvds. That’s the first step. By default it will try to make dvds to fit onto single layer dvds, so if that’s what you want, you don’t have to adjust that.
Start the program, click on the green + sign on the right side of the main window to bring in your first mpeg file. This will be inserted into the compilation as a separate title, just like in VideoReDo. AVStoDVD may want to index the files…let it do so. And if you get a little pop up window asking about the audio stream, just click on the X to close that little popup window. Keep doing this till you have all the mpeg files you want for this particular dvd in the compilation.
At this point you are ready to add the menu. Click on DVD Menu at the top of the main window in AVStoDVD. You’ll see lots of options in this menu wizard. You can change settings in here if you want to, but the one button you really need to click is called Run Editor. This will bring up a preview of the menu, showing the various thumbnails and the text. Put a dot in the little circle for Edit (under Mode) at the bottom left. This will let you change the parameters and text of the menu. Once you have it the way you want, just click on the X to close the window. You will now be creating a dvd with a menu as you set it up.
Now you’re back in the main window of AVStoDVD. Set your output folder for your new dvd you are making. Then click on Start. Since you aren’t re-encoding anything, this process should be reasonably quick.