This sort of proposed "pick a DVD" setup violates the DVD-Video navigation specifications, and is therefore impossible. There have been programs in years past, that made promises to "combine DVDs", but the result was essentially an out-of-spec butcher job. Those programs are all has-been tools, long since gone from most of the internet.
What has to be done is that a new DVD must be authored, and the structure would be as such:
- Main menu, with two options: THIS (old DVD1) or THAT (old DVD2)
- THIS menu: clone or redo of original menu from the old DVD1
- THAT menu: same as above, for DVD2 content
Or in all honesty, make a better single menu that presents both pieces together.
Of course, this all requires effort and work.
The easy solution is to hand out two DVDs. Whether burned or replicated, it's still relatively low cost. But "easy" isn't necessarily better.
I've had to deal with this scenario at least once a year for that past 5+ years now. With small organizations able to make their own DVDs (which is NOT necessarily the same as them making good DVDs!), they find themselves in these sorts of pickles all the time. To make matters worse, they rarely seem to have the original assets to recreate the DVD menus or artwork, possibly having not even archived the original pre-encoded footage.
I would do this in Ulead DVD Workshop 2 -- it's so, so easy to make pro-quality menus/authors in that program. Minimal effort, thanks to a dummy-friendly drag-and-drop interface, but still plenty of control over custom menus and navigation structure.
They posess copyright to all the material.
I've come across this sort of statement a lot lately -- not really sure why that is. In general, I think it should be assumed that the person requesting work owns the copyrights, or in some way has provisioned proper licensing for the assets that will go into the project.
If you're providing a service for others, copyright management (royalties, patent infringement, etc) is really their issue to worry about, not yours. The only time a service provider really needs to overly worry about copyright ownership is if you're being given a project that seems "fishy" in some way, and that may require more information, or possibly result in turning away the work. (However, I'd mention that that is an area where it generally takes a professional that knows the field well enough to understand what is/isn't "fishy" in some way.) We deal with filmmakers, studios, research groups, educational facilities, etc -- and we never hound them with "nosy Betty" type questionnaires, as some services and freelances seem to be doing. A cursory check for validity, and statement on an invoice, is honestly all that is required.
To further example, this is a theatre, meaning that they're performing a play (or opera, musical, etc). Now a playwright/composer/whatever wrote it, and there's possibly music in there. Do you really want to get into the investigative business of examining all of their documentation, regarding licenses for use of those performances pieces, including any clauses on how the performance may be archived or distributed? That would be nearly impossible, and to a degree it's none of our business.
This isn't directed at you in any way -- just a response to what seems to be a panicky mood observed in 2011.