Thanks so much, Bob, Vegas now works great. I am a much happier video editor now! 🙂
The best work around seemed to be:
1) Go to the Vid-Cap Plug In Folder and copy aviplug.dll
2) Go to the I/O Input Folder and replace the exisiting aviplug.dll with the one from the Vid-Cap folder (make a back up of the original first)
3) Run Vegas