I have an already rendered DV AVI file that's 2+ hours long. I need to change a couple of scenes in this 2 hour clip. I was wondering if I can swap out the scenes on the finished AVI file and re-render it to another AVI with minimum generation loss? Would Vegas be intelligent enough to not re-render parts of the AVI that has not been modified?

I've seen the message "No re-compression required" once in a while when the original clip had no effects applied to it.. I'm hoping this can confirm my theory.

You are correct in your thinking.
The only time Vegas needs to recompress (re-render) a clip is when it has been changed in some way, shape or form.
If nothing was done to it, then it's untouched.
A number of years ago, one Vegas user did a test that went to 100 generations.
The 100th generation was virtually identical to the original clip so we know the encoder in Vegas is one of, if not the best, DV encoder there is.

Mike - it's not the quality of the encoder, it's just that it's not re-encoding to DV codec when it doesn't have to. Most NLE's will do the exact same thing.

Cool thanks guys!

If nothing has changed, then it just copies the data from one file to the other. This is a completely lossless procedure, only the portions of the program that have been modified from the original will actually be encoded. For those portions which do get reencoded, extensive testing has proven that the Sony DV codec is the best DV codec there is and the loss is extremely minimal.