You might be right. I'll return the camera since it's new and I can bring it back, and I'll try something else. Maybe I'll search in the forums or do another post to see how what cameras others are using to do 720p, or maybe i'll just forget about HD for now and just get a cheapo (but nice) regular camera. Anyway, my final destination is HD youtube, so do I really need an hd video camera for this?

Make sure your video card has an updated driver. I had problems with the mpeg 4 from the Sony EX3. I was able to upload a new Nvida driver for the video card and presto all is well.

Recently I tried 2 very similiar AVCHD/mp4 camera models from SONY. They had the same format and nearly the same bitrate also. The old one DSC-T500 from 2008 showed 30++ Fps in Vegas preview and the newer oneDSC-T900 from 2009 showed 4-5 Fps.

Now I use the DSC-T500. Preview: always 29.970 Fps. Render time to m2t 720p 30 Fps for a 10 minutes video is less than 5 minutes.

The video quality is great - Used the DSC-T500 in China, Sweden, Thailand (+30 C) and French Alps (-10C) - took several thousand stills and video so far.
Of course I could use a "real" video camera - but people on the street tend to get a lot less irritated when they think that you just take a quick photo with the little pocket camera - and not some video :-)

My guess is that what you describe as a little sony hand held camera in your starting post is something like the DSC-T900 - which is totally unfit for editing.
I have no idea as to why the camera manufacturers make their cameras so that the media can not be used for editing - One would think that that was the purpose of it??

I am using the DCS W290....and I totally agree with you about these cameras being great for filming people without them really knowing or thingkning they're being filmed! It's awsome actually, and then the quality, at 720p is pretty amazing, not professional obviously, but then again, it depends on how much care you put into filming it, I think you can do some great stuff with these little things. I'm going to bring my memory card to the sony store and pop it into all of their cameras that might interests me, take some video and bring it back home and see what performs the best. I'll post my results on this thread.

Great. Looking forward to your next post.

Some of the cameras have more ways to record and store - i.e. "normal" and "fine" and "superfine" etc. for the compression - please also make some test recordings with the most interessant settings for each camera, if possible.

I have a Sony DSC-W270 and I see the same slow frame rate problem using Vegas Pro 8.0c with MP4 files. I also have a fast computer and have no problem editing HD AVCHD format files from a second Sony HDR-CX6 camcorder. It is also very slow to import the MP4 files into Vegas. Takes about 9 seconds for a 18Meg MP4 file while a big AVCHD MT2S file imports so fast I can't measure it.

I suspect the problem lies in the codecs with these particular MP4 files and not Vegas. if I try to play the same MP4 files in the QuickTime Player, then the performance is also very slow to load the file.

I also find it strange what when QuickTime or Vegas is struggling to handle these files, the computer seems to be doing nothing! The CPU and the DISK are idle as shown in Windows Task Manager and the Resource Monitor. It's like the codec is saying, I don't like these MP4 files so I am going to make you wait around while I go to sleep for a while!

I tried using the same MP4 files in Adobe Premiere and the performance is much slower than Vegas. Suggests to me that the problems lies in the MP4 files and the codecs.

Also realised that when I am seeing the CPU and DISK idle during this time, the codec could be offloading some work to the graphic card as that would not show up in Task Manager.

If that is the problem, you solutions would be the convert the MP4 files, or put up with the slow performance (which is what I am doing).