Wow, so for some reason really weird things are happening.
1st: All of the files that I have recorded previously are apparently AVCHD (even though I recorded them on the setting of Playstation 3 in Hauppauge which is supposed to be .M2TS).
2nd: As a test, I tried recording footage in AVCHD format and it imported perfectly with no errors or anything.
So, I still have a few hours of footage that I would like to use but as stated before Vegas will crash whenever I try to bring it into the timeline. The only option I see is converting the file type. Does anyone know of a file converter that does not lower the quality of the original file?
P.S. I am going to try using the conversion tool included in TotalMedia Extreme (software included with the Hauppauge)