Edward, I used to recommend that (I bought the Morgan codec myself) until I read about the VirtualDub trick on a video forum somewhere. To my surprise, it works – and it’s a free alternative 🙂
I’m guessing that you were using your computer monitor to judge colours and you’re viewing the final on a TV set.
Due to the gamma differences between the two, a computer monitor should NEVER be used for colour correction because it leads to the exact issues you described.
Even a (properly set up) cheap video monitor/TV set is better than a computer monitor for this purpose. BillyBoy’s site has some good tutorials on how to work around this issue.
Download Vol. 1 # 7 of Edward Troxel’s newletters. The article was written for Vegas 4 & DVD Architect 1 so there will be a few changes but you should still be able to do it without any problems.
As wmv is a compressed format, there will be a quality hit doing this.
Try this instead.
Load your avi into VirtualDub (free) and resave it (as an avi using “direct stream copy” mode) under a new name. This apparently rewrites some header info so that Vegas will now read the file.
Nothing in Vegas itself but search for an article called “A Guide to Using DeShaker” by John Meyer.
It walks you through the process using a variety of free tools.