My problem is based around a change in format. I searched here using the words 'Vegas 7 and mp4'. The problems people have experienced seem endless, and more worryingly, there didn't seem to be a consensus on a fix.
Briefly, I've used MiniDV tape and my Panasonic GS400's for years and edited the captured AVI's using Vegas (now v.7) with no problems whatsoever on a middle of the range PC - currently a dual core 2.6Ghz Win XP Pro, 4Gb RAM, 9800GT GPU, dedicated partitions for media and rendering.
I bought a Sanyo WH1 for holiday which records to SD card in mp4 format using the 'MPEG-4/H.264' codec. It does a pretty good job in daylight and the underwater shots are priceless for holiday videos.
The problems arose when importing the mp4 files into Vegas 7 and trying to edit them in the same way that I have been with AVI's. Importing one file was fine but 2 or more hung the PC. I was able to try Vegas 9 fortunately, which imported the files fine. I was able to edit in the same way as I had with the AVI's with no lag or slow down etc. Problems arose when adding other file formats - ie JPG's and .MOD format video files from a JVC Everio. The render process stopped with a memory error at about the 12% mark. This was a well documented issue & I tried the suggestions about changing some settings for this but it had no effect. However, rendering an ALL mp4 format project worked fine though. A search of various sources like here has produced a thousand people experiencing a thousand different problems similar to mine.
So far I think I have been able to work out that an update in PC hardware would have some effect but that doesn't seem to be the sole factor.
I don't think it's a codec issue for the mp4's. I can see/hear the mp4's in Vegas, albeit in a choppy fashion. I installed Splash Lite to playback mp4 video clips which works fine.
Not sure about the inability to mix .MP4 & .MOD & .JPG in the same project. Is that a limitaton of Vegas 7 & 9 or am I doing something wrong when trying to use these formats
I read a useful article about creating Proxy files for editing then replacing them with the originals for render. I can understand this as a possible workaround for legacy software but it sounds a bit Heath Robinson for a modern version of poplar software. Perhaps I've been spoilt by the ease of use of AVI's. Am I demanding too much to be able to edit heavily compressed HD MP4/H.264 files in real time?
I would say that I have read that some people with powerful 64bit PC's still have playback problems with latest versions of software.
I do like Vegas and have invested a lot of time in getting to know how it works so would prefer not to change software, likewise, I'd like to avoid a several hundred £ outlay for new hardware that isn't guaranteed to solve the problems.
I can't help feeling that as AVI's were so straightforward to use, that my view of new formats is somewhat polarised and I'm missing something obvious, after all, no modern camcorders use tapes these days.
All help appreciated,