There's really no need to convert when using Vegas. I believe the Cineform codec costs some money that's why you don't see it in Vegas, but if you don't want to convert to DV, then I'd just use a flash drive and do the conversion on my mac and convert it to prores there since Vegas can read ProRes files. I don't think you'll see much improvement. Even with multiple layers and efx. You'll want to "re-connect" the media if you're looking for the highest quality anyway, then you render using the vob so there's no loss.

so do you do your conversion to prores in mpeg streamclip?

Don't you need to own Final Cut Studio to convert to Prores?

yeah, you can convert to prores in mpeg streamclip on a mac and the prores encoder comes with fcs. if you're editing on your quadcore pc, editing vobs and even mp4s are fine, no need to convert since your pc can usually keep up. now if you had hi-def material, then that's when you really need to look into converting your files to hdv, prores or cineform. but sd material is cake for vegas on quad-cores, even dual-cores. that's what i used for 2 years before i got my quad laptop.

Agreed no need to convert when using Vegas, even my old laptop that had 1.7Ghz Dual core would keep up.

If I were using vegas, i'd edit the vobs directly. i guess. remember also, if you are reconnecting media to the original vob before render, the intermediate format is really not important.

ah, you must have final cut studio to do prores in mpeg streamclip. that would explain why i can't find the option.
i am pretty sure all i have is final cut pro...not really sure since i have only opened fc maybe twice.