Hi Will.
I am running Vegas 10. Editing in HD mode directly from the SD card.
I have the same problem of severe Lag when running in realtime. The Timeline is Ok but running the edit is VERY jerky.
My PC setup is Foxcom mother board, Intel Dualcore 1.8G. ATI Gforce 3450 (512 meg). 3 gig of DDR 2 ram.
If I edit CVBS (Video) it runs ok but the required speed is much slower. The video quality is poor (VHS) compared with HD edits I have seen.
So its a trip to the PC shop. ASUS Main board, Quad core Intel 3Gig. 4 gig of DDR3 and a 1GIG ATI card. I will let you know if it fixes the problems.