Update on this situation...
I thought the problem may be that I am trying to create a Blu-ray production and that maybe it wasn't possible to create chapters in Blu-rays, but that isn't the case. Regardless if the movie I have added is an MPG file or a Video Wave File, and regardless if i am making a DVD or a Blu-ray, whenever I play the production within the program and regardless of which chapter I select, it starts at the beginning.
I opted to do a complete uninstall using the c2011_cleansystem.bat file and the instructions on your site then re-installed 2011-Professional and the exact same thing happens.
I haven't actually burned a DVD or a Blu-ray to see if the same thing happens on it, but I'm assuming it will since when I play the production within MyDVD and select any chapter, it starts at the beginning. I have verified that each chapter is set to start play at the chapter it corresponds to (i.e. Chapter 2 will start at Chapter 2; Chapter 3 will start at Chapter 3; etc.).
In summary, it doesn't matter if I am creating a Blu-ray or a DVD or am adding chapters to a Videowave project or an MPG file--I am able to create the chapters and they properly display and I can highlight them, but when I play any one of them, rather than starting at the chapter, it starts at the beginning of the production.
Thanks for your assistance.