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Accepted File Types for Vegas
Video: Vegas can pretty much take any file type with very few exceptions.
The best one that works the fastest and has good quality is DV AVI.
Windows Media files (.wmv) are fine as well, just very slow in rendering and playback in Vegas.
Quicktime (.mov) is also accepted, as long as you have Quicktime player installed.
Even Real Media files (.rm, .rmvb) can be accepted, after you put them through AVISynth and a complicated process that I don't understand, so I can't tell you about that.
DIVX is also accepted, as is the original DVD files (.vob), though you'll have to watch out for black frames randomly popping up.
You can also put in XVID files, AFTER you change the FourCC code for Vegas to read it—otherwise you'll end up with the audio and no video when you load XVID files into Vegas. But you'll have to watch out for black frames with these as well.
MPEG-1 and MPEG-2 are also accepted, but aren't as good quality-wise.
The only files Vegas flat out rejects is .mkv files, so don't even try; you might as well convert it to another format that Vegas can read.
MPEG-4, it depends on the container—it can pixelate badly under the wrong container.
Audio: Pretty much any file type can be accepted into Vegas, so you don't have to be so worried about file type.