Are you talking about using the new Sony HDR-FX1 camera with Vegas ?
You have several choices & the way you should go depends on what output you want to produce.
You can let the camera record in SD DV & capture that to Vegas. Apparently it does well at recording SD DV.
You can let the camera capture as HD, then let camera down convert your HDV footage as it captures. This will mean that your archived taped footage remains HD, while SD DV is captured.
OR
If you want to convert your HD (MPEG-2) tape to HD (AVI) for editing then you will need to get the "Connect HD" plug in.
The plug in will let you either convert HDV files on the hard drive, capture & convert drirectly to it & supports capture back to camera.
You can get a fully functioning 15 day trial of "Connect HD" here.
http://mediasoftware.sonypictures.co...ct.asp?PID=959
If you purchase they will send you a licence key to unlock the trial version to full version.