Hi, I have not experienced this, but I recommend you to close Vegas after you have changed the configuration (maybe, Vegas saves the changes only when it exits)
Any codec which is lossless has no quality loss 🙂
You can try AVI Uncompressed or AVI Sony YUV or MOV PNG (HUGE files!), you can install good lossless codecs such as Lagarith or HuffYUV or… choose yourself
Chrome does support H.264 (moreover – it is hardware-accelerated) and Maria’s video from jsfiddle (as well as directly from dropbox) plays just fine in my Chrome (ver. 24)