Well, I'm stoked.
I just finished adding menus and chapters to a video. Plugged it into my DVD player and the main menu came up, with alooping animated background and choices "Play Movie" and "Scene Selection"
"Play movie" jumps to chapter 1 and plays through to the end. "Scene selection" jumps to a second menu with, naturally, scene selections (that will jump to the selected chapters).
Pinnacle Studio is an incredible piece of software...