Well, legally, after the Digital Millennium Copyright Act (or whatever it's called) if there's any bit of an actual DVD rip in your edit at all, it's illegal. and even under the old rules, you can back up your OWN copy, but distributing that copy, even not-for-profit, is illegal. Even if you own the original, proving that you backed it up yourself would become a sticking point.

That pretty much covers most everything here. But like it's been said--Lucasfilm recognizes a)these aren't any financial threat, at least not here, where they're NOT being sold (hopefully that's still true, I heard word that people here via PM have been selling trilogy sets for 20 bucks, which I KNOW is more than the cost of 3 blank DVD's, some cases and covers) and they're not eating into profits, since Lucasfilm has ceased to sell the versions being captured from Laserdisc and b) it'd be silly to spend time and money going after people who will, if this becomes public, have a HUGE groundswell of support from most other onlookers. It's just not worth the effort.

But legally, there's not much ground to stand on, if they wanted to press the issue. Luckily, they don't.