Ok, let me explain myself. I have been using Sony Vegas for a while now and have never had this problem. Basically what Vegas is doing is blowing up every image i import and making it as big as possible. So tiny images are filling up my entire preview screen and look very distorted. Before it would keep everything as its origial size, its blowing everything up now. If i wanna import a 20x20 image it isnt keeping it as its original size!!!
Here is a picture of what is happening (small image being blown up): http://i45.tinypic.com/20rw5uc.jpg
Here is a picture of what is happening (small image being blown up): http://i45.tinypic.com/20rw5uc.jpg