I’ve also had this problem… I split a Theatre Play into 8 different .veg projects, one for each of the Scenes in the Play. All of them except one rendered fine after editing – imported footage was all AVCHD / MP4 and rendering output was always m2v (HDV 1080-24p).
Effects applied included brightness/contrast as mentioned above, cropping, motion tracking, and Sony Rays effect.
I noticed the ‘freeze’ happened regardless of where in the project I set the render region. If the render region was small enough, it rendered fine. If it went over a critical size (about 604MB) it would freeze. In the end I had to split the scene down into 7 sections of 604MB, render them individually, and then stitch them together again in a new project.
My system is 64 bit, Windows 7, quad core processor, 8MB RAM, using Sony Vegas 9.0e.