Glad you found a way around it, AVC(H264) is a delivery/capture format (e.g. delivering on Youtube, recording footage on digital camcorders nowadays), simply said it only records differences in movement and not full frames, Vegas will have to take more time to decode the file in order to regenerate the frames from the source AVC video, but I’ve think compatibility has improved in Vegas 12 in handling such files.
Shadowplay may have used a variant of AVC(H264) that was optimised for capturing, though Vegas could open the MP4s it makes, it may not behave properly because it’s not entirely compatible with it.
Happy editing,
RickAVC