I did some more research. I was using my inventory system and by chance decided to reset my password and noticed it said I was logged into my old machine name. This made me think that this software is probably pulling its information from the local machines.
So I scanned my registry on the computer for the old computer name. Found it in several locations and changed it to the new name. I then rescanned the domain with the software and now the pc shows up with the correct name in the list. However the old computer name is also in the list, but its ip address is listed as the old computer name. (odd) I thought maybe it was stored so I deleted the files that the program stores in my docs and in program files under backups. Reloaded the software and scanned the domain again, still shows up. Scanned my registry again for any instance reappearing after reboot, but it found nothing.
So I know it is pulling the data from the actual machines and not active directory on the server, but I still can't explain why the old name still appears in the list.
Edit: I just did some more tests and the software cant get any info on the old computer in the list (properties, info, etc). It says it cant connect to it, but its in the list. Maybe it is remembering it from the previous connection and the files I deleted arent the only place the software stores its info.