OK, lesson learned.
However, the original format is MP4, my Phone's HD camera records directly to mp4 format.
So what would you suggest converting the files into, to make it compatible with Vegas?
For some reason the preview for mp4's lags terribly, much more than avi's or other filetypes. It gets worse when effects and transitions are applied, to the point where you can't even tell what is going on in the preview.
The movie will render fine, its just the real-time preview that is...
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