I think that from what say your problem is a misunderstanding of what you have done.
1. You captured at reduced quality to save disc space.
2. You then edited your three tapes to produce a final video.
3. you then want to produce a final video to disc or tape using Make Movie.
Ok you are asked to put in video 1. This is because you have not got a full quality copy of your master tape on your hard disc. All you have is a reduced quality copy which is going to be used by Pinnacle as the guide to the final copying. i.e. taking the data at the appropriate point from your master tape.
I hope that I have explained this clearly enough for you to realise that the Pinnacle software is asking for your video1 master tape to be available so that the full quality clips can be taken at the point dictated by your edited low quality version.
So connect up your camera again and put in the appropriate master tape as request. It should work.
I had a lot of problems doing what you are trying so went back to capturing at full quality then clearing the capture off my hard disk to clear space for my next epic.
I hope that this helps.