Billups missed a layup in the final seconds, allowing the Pistons to run their winning streak to a season-best four games.
"I got what I wanted," Billups said. "But I tried to get the foul too much."
Detroit dealt Billups to Denver 13 months ago for Allen Iverson and his expiring contract to create salary-cap space -- which the Pistons used to sign Ben Gordon and Villanueva -- and to speed Stuckey's development.
"I know it was tough to let Chauncey go because he was a winner who the fans loved, but we really have the pieces to be good this season and the years to come," Villanueva said. "I just can't wait to see how good we will be when we start getting some of guys back."
"It's very rewarding to watch our guys compete," first-year coach John Kuester said. "We're starting to learn how to win and finish games. That's huge."
Carmelo Anthony scored 40 points for Denver, Billups had 21 and reserve J.R. Smith added 14. The Northwest Division-leading Nuggets have lost consecutive games for just the second time this season after winning four straight and eight of 10.
"We're not a great team," Billups said. "We're a good team. We should be winning games like this, and the Charlotte game."
Denver coach George Karl agreed.
"We did what we've consistently done in losses -- we give young teams hope and confidence early," Karl said. "I didn't think we took them seriously in the first half.
"Our scouting report was focused on Stuckey and Charlie, so it shouldn't have been a surprise that they were the ones scoring."
The Pistons knew Anthony would be the one scoring for Denver, but they couldn't slow him down.
Anthony had 30-plus points for the 14th time this season, one more than all of last season.
"He's amazing when he gets into that offensive groove," Karl said. "But we just didn't have enough guys going with him."
Denver's Kenyon Martin (dislocated left pinkie) missed his second straight game.
Billups' return didn't register much of a buzz at The Palace, where he was adored for helping Detroit win the 2004 NBA title, and he fell to 0-3 against Detroit as an ex-Piston.
"It's still like coming home when I play here," he said. "It's always going to be fun. I'm never going to let this put a blemish on what I feel about this building and the fans here."
Detroit was very competitive despite adding Bynum to the list of injured players.
Wallace's hustle helped the Pistons hold on over the last couple of minutes, scoring on a putback and stealing a pass in the backcourt to set up Stuckey's layup that put them ahead by three.
"Ben is playing great," Billups said. "I'm happy for him because he has rejuvenated himself. He's all over the place, blocking shots, getting rebounds and tipouts."
Anthony missed a free throw on the ensuing possession with 52.6 seconds left, then Detroit failed to make a shot on consecutive possessions. Denver had the ball at midcourt with 6.1 seconds left and Billups got a good look at a shot in the lane.
"It was Chauncey in Detroit so I thought that was the right shot, and I'm happy with the look he got," Karl said. "It just didn't go down."
The Pistons went from being a consistent Eastern Conference contender with Billups to a team that barely made the playoffs last season and got off to a slow start this season before a recent surge.
Billups said fans in Detroit should be encouraged by the team's present and future. "They've got some really good young players," Billups said. "Stuckey is coming into his own as we all knew he would and they have some veterans who know what it takes to win. They're going to be fine."
Pistons president Tom Wilson declined comment on a CBSSportsline.com report the team's gate receipts are down 42 percent since the same point last season, but Wilson acknowledged "obviously, our numbers are down," as he looked toward sparsely filled upper-deck sections before the game. ... Anthony, who entered the game averaging an NBA-best 29.6 points, has failed to score 20-plus points in only one game this season.