My capturing program only lets me record in AVI. It doesn’t like some codecs (ffdshow screws up a lot). The x264 codec works really well, but Vegas doesn’t like it.
BTW I’m running Windows 7 with a 64 bit OS. I have 64 bit Vegas. I have 8 GB DDR3 RAM and an i5 760 quad core processor. While previewing the file my CPU is at 35% and my RAM is at 30%.