I created a pallet so that I could use the new DMC Variations. However, PC Stitch 7 only saves these colors as a pallet. I need to be able to change existing colors in a design (using standard DMC colors) with this new set of floss. I do not really want to use the floss editor to change the default settings. If I made the changes there, I think that I would have to recreate these colors every time there was any floss updates.
Use the floss editor to create a new floss file with just the additonal colors in it. You are correct that if you put them in the existing DMC file, they would get removed by an update, but an update won't have any effect on new files you have created.