There’s no single answer.
Yes, technically, if you render based entirely on resolution, you’d simply scale everything up by 5x (PAL) or 6x (NTSC) to deliver a full 1920×1080 HD output at the same frame rate.
However, that’s not really done. For one, it’s not strictly necessary. Even for a fairly simple CODEC like MPEG-2, scaling up by 5x or 6x the bitrate isn’t really necessary for a perfectly acceptable video output. This is due to much smaller, relatively, macrocells each having less of an effect on the overall video. So, for example, while DVDs tend to run up to about 8Mb/s (peaks are higher, and of course, the actual value is very carefully tweaked on a professionally encoded DVD), while broadcast ATSC at 1080/60i has a maximum rate of 19.4Mb/s. Both are MPEG-2.
Blu-ray is more involved yet. For one, it can support video bitrates up to 40Mb/s or so, though it’s rarely necessary to go so high. And while you can encode in MPEG-2, the option to use AVC (aka H.264, MPEG-4 part 10) is a big advantage. Well-encoded AVC has about twice the coding efficiency as MPEG-2… that means that, what looks good at 20Mb/s in MPEG-2 ought to look about the same at 10Mb/s in AVC.
Most camcorders, of course, use higher bitrates. The typical consumer/prosumer MPEG-2 HD camcorder records at 25Mb/s, the typical more advanced MPEG-2 camcorder may run 35-50Mb/s (probably added 4:2:2 color once you’re up at 50Mb/s), and AVC camcorders typically support recording peaks up to 24Mb/s for 1080/60i video. That doesn’t necessarily deliver video that’s twice as good as that 25Mb/s MPEG-2 camcorder, though. There are some limitation on just how complex an on-camcorder AVC encoder can get to-date, which is not necessarily true when you’re rending on a PC.
To actually answer your question, you have to flip it around. The best possible rendering of your DVD material, as you note, is when you’ve pretty much filled up that 8.5GB on a DVD9… or, the 4.7GB available on a DVD5. The best you’re going to get on a BD25 is when you’ve rendered the video to fit in just about 25GB worth of space. With that said, there’s certainly not much to be gained by cranking your 24Mb/s original video up to 35Mb/s or something, just to fill the BD25, if it’s a shorter video. Rendering to AVC will probably give you a better result than rendering to MPEG-2.
But keep in mind, Vegas sets some limits on AVC rendering, and the situation is a bit confusing. Sony actually supplies two AVC encoders: Sony’s own, and the MainConcept AVC encoder. The suggestion is to use the Sony encoder for Blu-ray and the MainConcept for small devices (smartphones, iPod, etc). However, the Sony CODEC only supports constant bitrate encoding and single-pass. It delivers a good result, but you could nearly always do better with variable bitrate and dual-pass (the two are related — without VBR, there’s nothing for a dual-pass encoder to do). Pretty much all commercial DVDs and BDs are encoded VBR, which ensures that bit rates go high for fast motion, but slow down when not needed to save disc space.
-Dave