Don't know if the following could be considered bright:
If you used [whatever] software to backup the commercial DVDs, then you ought to be able to make back up copies of the unencrypted VIDEO_TS folders using any software capable of burning a UDF DVD-ROM (including Disk Utility). If you did the AVI conversions yourself from the rip, you should be able to re-do them using a standard home-theatre DivX format that Toast will accept. I assume you chose the AVI format so that you could fit more episodes on each disc, but if that's not a concern then why not just use the backup VIDEO_TS folders to create the DVDs for your family? That way you get the full disc with subtitles, etc.
Unless....the commercial DVD has no subtitles, and you had to go searching for srt subs and need to add them yourself. In that case you'll need to encode new AVI files (from the backup VIDEO_TS folders) to the standard home-theatre DivX format, and add them and the srt files to a DVD-video (MPEG2) disc for re-encoding. I understand that the inclusion of subs through Toast's MPEG2 re-encoding can be unpredictable, though.
There's also the possibility that Lion has reared it's head, and broken some of the Perian/QT linkages.