As a rule you need to have a codec installed on your pc for vegas to be able to edit a particular source of video.
As with many things it often doesnt appear to be that simple and I am not a codec expert, some one else more knowledgeable may have more to offer.
I suggest installing a codecs that you want to edit if you havent already done this. As a rough guide I find that if something plays in windows media player then I can edit it in vegas, but for some reson I have often had trouble with xvids...
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Lowering the tone of video since 2004. www.zaskarfilms.com You tube channel 'zaskarfilms'
JVC DV5001e (big cam), Sony PC6E (tiny cam), Vinten pro5, PAG light, SM58, Sony ECM50, Sony C-76, 0.5x convertors for sony, Rode video mic, Vegas 7.
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