The new video should be only about 3:30 in duration, but PE-10 still thinks that it's 1:30:00. How can I terminate the new video in such a way that the proper duration is established?
I don't think I understand your question, but did you delete the part you cut off?
Expand the timeline and make sure that you don't have any orphaned files.
For more info on Orphans, see this article: http://forums.adobe.com/message/2887552#2887552