I admit I'm not 100% knowledgeable about the inner workings of the deal but is it possible Paramount's home video division could be affected by the split?
This will not have any effect on the Paramount Home Video division. Dreamworks will make a deal with another company to distribute their films (most likely Universal) and that company would handle DVD and other ancillary rights for the new films. Paramount will continue to run their home video division as poorly as they have in the past.