Your project settings should match the footage your editing.
HDV 1 720p, HDV 2 1080i, both are in .m2t format. HD can be several formats. If you click on one of your videos in the Vegas explorer or project media tab, it tells you at the bottom of that window what the video is. Select a project preset that matches that. As far as 8 or 32 bit, I can get better contrast setting it to 32 when editing HDV, where my other two cameras shoot 1080 60p and setting it to 32 bit makes no visable difference.
Also if your burning DVDs or BR discs and your footage is interlaced, leave it that way as the players will deinterlace it for you. I usually watch my videos from a computer so if my video is interlaced I set my project settings to Progressive, method to blend for fast moving video and interpolate for slow moving video. Playing interlaced video from a computer, the interlacing is very visable.
Hope this helps, Danny Hays