We have accidently started “specializing” a bit in just this sort of thing and have learned a few techniques that can make the image acceptable. Like you, I started a few years ago with my son’s wedding video and learned ways to make differences in the quality. Low-end video cameras have low end lenses and also suffer from poor colorimetery, noise and audio problems, and most footage has been shot with auto everything (which usually means that colors and exposure levels change with any movement of the camera or subject.)
Of course, you’ll never make that $300 miniDV point-and-shoot look like a $10K HD camera and excellent lens in the hands of a good shooter, but you can make footage look better – sometimes a LOT better.
You’ll still run into the ‘amateur cameraman syndrome’ with excessive zooms, shaky cam, etc but some creative editing can go a long way to get rid of the really bad stuff.
We use Adobe After Effects and also Photoshop, but I’ll assume similar tweaks are available in Vegas. I usually start with shadow-highlight effect. In many cases it is a quick fix for all but the darkest images.
For really dark footage, try layering two copies of the footage with screen blending mode on the top layer. Three layers might be needed for the really dark stuff.
At this point, you should have useable video levels but a LOT of noise. Converting to B&W and/or sepia is one creative solution, but seemed a bit “artsy” for the style of footage I usually get. After Effects Remove Grain (effects > noise & grain > remove grain) can work wonders. You might also want to try Neat Video’s noise reduction tool – the demo I tried was fantastic on noisy video and I think it is also available for Vegas. ReVisionFX and maybe Boris also have NR tools, but I haven’t used them. There are some other ways to deal with noise. A web search will lead you to some techniques involving blurring the blue layer, for instance. However, I haven’t found any that were acceptable for really noisy stuff.
Color grading and matching can make footage from low-end cameras look better, but requires some finesse and maybe a bit of a learning curve. If you’d like to post a bit of footage (or send me something you find particularly challenging) I’ll see what I can do and then post the ‘formula.’