I am not sure that this is the answer, as both methods of file creation are failing, but hey its worth a go. In Ulead Video Studio check the following,
1. From the File menu click Preferences
2. Click the Preview Tab
3. Uncheck the Limit hard disk usage to checkbox
4. Click OK
5. Good luck
If the Limit Hard disk usage checkbox is checked then the video creation process will terminate when this amount of disk space is reached. In addition it would be helpful if you could post any specific error messages. Otherwise I would recommend posting your query at http://www.ulead.com/tech/techsupport.htm as well as applying the latest patches for Video Studio from the same site (at least one of these refers to fixing Preview Problems).
COMPAQ something or other with 500Gb Boot Disk, 1Tb external Firewire Disk, 4Gb Memory and a super duper sound card, 19" TFT Monitor etc etc etc
Sony TRV33e : Sony TRV310e : Canon XM2
Sony Vegas Studio editions to v11
Remember, there is always more to learn than there is to teach.