"Indy Jones Chronicles are currently being cleaned up, are having documentaries added to them and will be shopped as “films for a modern day high school history class.” He’s [Lucas] hoping they’re released on DVDs very soon."
Update: IGN.com published an article on Lucas' Young Indiana Jones Chronicles DVDs containing more detailed info and bits on the process of making this DVD collection:
The DVDs will include the reedited versions of the series previously available on VHS, which took the 44 episodes of the show and turned them into 22, 90 minute, feature length stories. Lucas conceived of doing this very early on, and when the series first wrapped production, shot footage that would help link the episodes more cohesively.
Lucas mentioned how the series was shot on 16mm, which allowed more money to be spent on the production and allow for longer shooting schedules than it would have otherwise had. However, he said, "we're in the process of enhancing and cleaning up [the picture] for DVD." Having mentioned the cost constraints the The Young Indiana Jones Chronicles was under, he also humorously stated, "We're spending more to clean things up then we did to shoot it."