Using the proper utilities you can extract the audio and video from the DVD and make changes (Vegas isn't the best editor for this though) and then re-author. There are even utilities that will let you do things like add menu links, additional content, etc.
Vegas 6 is a somewhat useful utility for this. File / Import / From DVD Camcorder Disc. This will convert your DVD to MPEG and drop it on the timeline. There will be slight jumps at VOB file breaks though.
Personally, I hate the way that vegas 6 imports DVD's (I always end up with hundreds of little MPEG files); in addition, the mpeg files brought into vegas will need to be completely re-encoded for the new DVD, which means a hit in video quality for everything. It it's just some simple edits, the Womble MPEG editor is a much better option since it only re-encodes when it needs too.
I'll usually use DVDdecryptor in streams mode to extract the audio and video streams from the DVD to seperate files. Then VOBedit to demux the AC3 or PCM from the VOB that DVDdecryptor creates (could be I'm incorrectly using DVDdecryptor, but I've always found this step necessary). If everything is in a single VOB on the DVD, then you can just use VOBedit to extract the video and audio streams and skip the DVDdecryptor step. Then, if the audio is AC3, I'll use BeSweet to convert it to WAV (I think BeSweet can also accept VOB files, but I've not played with that).
If I'm not worried about taking a hit in video quality, I'll use DVD2AVI to grab things into a DV AVI file.