Thanks for all your help John.
I updated the software to Sony Vegas 8 Pro c, from 8 Pro b and this helped. Then I started reading about 8.1 and the Vista 64 bit OS, and decided to do a clean install of the new OS. Now I am in a whole new world of issues. 1 step forward 2 steps back.
Vegas is running great however. And I was able to import directly from the DVD, so thanks again.
Corey Whitley