Thanks so much for the response. I tried everything you suggested. Here's the result:

First, I played the MPEG2 file in Windows Media Player, pressed pause, opened DVDit and tried to bring the file into the theme area. Received the same error, so this didn't take care of it.

Second, I brought a known working MPEG2 file into the theme area, then renamed it to something else, then renamed a non-working MPEG2 file to the name of the working file. I then right clicked on the theme picture and played the file. It did start playing the non-working file fine. Would it play it in DVDit if there were truly no headers, or is that still inconclusive? In any case, I left DVDit and went back in to see if it would stay in the theme area. It didn't. DVDit will not accept it upon re-entry. Not sure if that is relevant information, but just added it here in case. I didn't follow this process all the way through by attempting to create a DVD since if it fails, I will lose a $10 blank DVD. Plus, I make DVDs of music videos. This means that I load 28 files into DVDit to create a DVD. So the renaming process would take a great deal of time for every project I work on. So I am still hoping someone else may have another solution. But if not, at least you have given me some hope to not throw the computer in the dumpster!
Doug

It's the only way I can think of to get them in if you are sure they are DVD compliant. Can't you try just loading 1 so it's a small project & burn to re-writeable media to see if it burns & does the trick ?

You hit the nail on the head with your comment about being sure they are DVD compliant files. How I wish there was an easy way to determine this. The Ligos encoder I am using shouldn't have changed at all and there isn't a way in Vegas Video to alter the sequence headers, so based on that I am assuming that the headers are there. But for all I know, something behind the scenes is overriding the original Ligos software and not including the sequence headers. You know how temperamental all of this stuff is. The fact that I can import in MPEG2 files created from StudioDV to DVDit with no problem worries me that there truly is something wrong with my Ligos encoder in Vegas Video. And you know how Vegas Support is. I will call and tell them about my dilemma and they will probably say they can't support the Ligos product because it's not theirs.

I do have a rewritable blank DVD, but I have never used it before and don't know exactly how rewritable media works. Let's say I burn a small file to this DVD-RW and want to reuse it at another time, is there a procedure I use to clear that original file? It's seems to me that if I don't clear it and try to use it again, DVDit will tell me I am trying to write to a used DVD and request I insert a blank one. But you're right, this may be the only option I have to determine if headers are truly being added.

I can't thank you enough for the assistance! I look forward to your response and I will let you know how the test went with the DVD-RW.

With burning software that came with your drive (Veritas/Prassi Primo , Recordnow Max , Nero or the like) you will be able to erase the contents of your -RW disc. The disc itself should be good for about 1,000 rewrites.

DVDit should recognise it as -RW media & you build your project & burn in the same way as you would -R . (If the disc has never been used I believe that DVDit likes a full erase to have been done on the disc prior to first use. DVDit should perform this task)

There is a usefull little utility called bitrate viewer at http://www.tecoltd.com/bitratev.htm . With the freeware version you can view your MPEG stream but if you buy the full version (it's 29.95 euros I believe) you can actually alter your stream & force sequence headers to be inserted for each GOP.

If I remember rightly you can do this with elementary video streams only but with DVDit you are best bringing in elemntary video stream with seperate .wav file for the audio anyway.

Well, I went ahead and tried to write to a DVD-RW. I selected a known good MPEG2 file and one file from Vegas Video for the project. Right after selecting the write to DVD option in DVDit, a message came up again warning me that I have an illegal file. But I went ahead and told it to write it anyway. It went all the through the writing process and then the Flushing Internal Buffer status came up, which is at the end of the DVD creation process. But the system locked up there and I ended up having to abort DVDit to free it up. It wouldn't let me eject the DVD disc, so I ended up rebooting. But I thought that maybe it had completed the writing process and the disc would still be good to test. I put it in the DVD player and it wouldn't play. I would have thought it would at least show the menu and play the good file. What do you think?

Instead of getting additional software to insert headers, I wanted to let you know that I do have Vegas 3.0. I ordered the upgrade a year ago and I found it more difficult to work with than 2.0. Maybe it was because I was so familiar with 2.0 that it was tough to change. But I also noticed that the quality of MPEG2 file with the new encoder didn't seem to be as good as the Ligos encoder in 2.0. I did side by side picture comparisons and there was a definite degradation in the picture of the 3.0 produced file. But I would have thought other 2.0 users would have noticed this when they upgraded. Maybe I should open a new subject on this. I know you mentioned never having 2.0 so you wouldn't be able to answer this.

I have submitted a question to Vegas technical support about the Ligos sequence header problem. I hope they have a clear cut answer this time. If they do, I will certainly post it here.

As always, thanks for the feedback.
Doug

Things go from bad to worse. I decided to test writing to the DVD-RW with just the good file only and at the end of the process, it became stuck on the Flushing Internal Buffers message again. I rebooted and tried playing it in the DVD player, but it wouldn't play. So now DVDit doesn't appear to be working for whatever reason. The only thing difference from the last time I successfully used it is the DVD-RW. But I have a Pioneer recorder that can write to DVD-RW's. In fact, it is a Pioneer brand blank DVD-RW I am using. And here's the real stunner: I searched in the DVDit forum for the Flushing Internal Buffers message and did not get one hit! I am very close to giving up on DVD and writing only VCDs. Sure, the quality may not be quite as good, but at least I will have my sanity. This is getting ridiculous.

If you are going to use VV3 then make sure you have downloaded version 3.0c . There were supposedly large gains in MPEG encoder with this version.
http://www.sonicfoundry.com/download/step2.asp?DID=375

Will DVDit let you build folders or images with your project ?
Do this instead of burning to disc, then try burning with 3rd party software that came with your drive (Veritas/Prassi Primo, Recordnow Max, Nero or whatever).

I decided to try playing the DVD-RW from the Pioneer unit on my computer through PowerDVD. That did play fine. I think the problem is the DVD-RW disc is not compatible with my external DVD players. I tried it on both of them and they can't read it. Both DVD players were purchased within the past year, so they aren't that old. So I'm trying to understand how these DVD-RW discs are any good if only the unit that can play them is the one that burned them. It certainly won't help me resolve the issue of this sequence header problem. But at least I know I still might be able to create DVDs using DVDit. For awhile there I thought it was all falling apart.
Doug

I see you left me a message while I was entering the other one. Thanks for the heads up on VV 3.0c. I think I will download it tonight and give it a shot in the morning. Problem is, I don't know if the .veg files I created in VV2 are compatible in VV3. I don't mind rending all of the videos again in VV3, but to perform all of the edits and things I did with these projects in VV2 all over again in VV3 would be a nightmare. I spent weeks working on creating these projects in VV2. Again, this may be a good question for tech support since you never had VV2. Or I may post a message in this forum and see if anyone has upgraded to VV3 and used projects created in VV2.
I'll keep you posted. Thanks again.
Doug

DVD-RW is probably the least compatible format for stand alone players (after DVD-RAM). It is best suited for doing what you just did burning to check if the program is authored OK for playback on computer (before committing to write once -R media)OR for archiving files for back up.

If you want to look at compatability of various formats with stand alone players check out www.vcdhelp.com with compiles lists.

I, too, had poor quality MPEG encodes until I changed a few settings:

1) Change the "Video Quality" slider to 31 (all the way to the right)

2) I use VBR but changed the minimum to 2,000,000, left the max at 8,000,000, and adjust the average to fit the length of my video.

3) Change the "DC Coefficient" to 10 bit.

DougDVD:

Also, 3.0c uses MainConcept MPEG encoding. We think you'll like the controls and results better.

///d@