You should capture using the Vegas internal capture so you are working with the native M2T (HDV) file.
The best bet for viewing on your PC in HD is wmv9 format.
Do a separate Mpeg2 and AC-3 for SD output for your DVD.
You computer may be overheating during render.
Gary Kleiner
Learn Vegas and DVD Architect
http://www.VegasTrainingAndTools.com