Set the project properties to the same as the media you are editing (use match media settings) - this improves preview speed significantly compared to having another height or width.

If you convert your media files before editing (and you do not need much FX etc) then convert them to something that Vegas does not need to recompress when you render since this will minimize the degrading - i.e. for different reasons I render to HDV 720-30p for the time beeing and use Vegas to convert the AVCHD files to that format (HDV 720-30p).
When I then render the project Vegas skips the decompress/compress and simply copies the timeline media directly to the output - writing "No recompression required" in the preview window.

Info here
http://eugenia.gnomefiles.org/2008/12/19/sony-vegas-hints-and-tips/
You still need a fast machine to edit avchd.

Yes, I think it does need a fast machine. I've exported to both .wmv and .avi in full HD and it plays well. Just chokes on the AVCHD format. I am doing the highest quality on the camera....the lower quality ones had motion artifacts. It's not terrible, at the highest setting, 16MB/s, you can get 1hour and 50 minutes on a 16 GB memory stick that I got from Fry's for 66 dollars on sale. Hopefully a couple of years from now they'll have 32 GB or even 64 GB. The quality of the picture is superb, with no motion artifacts.

I did "pre-render" to a lower quality format wich plays well in the preview, but that does not seem particuliarly useful. After doing a single edit, it was just as slow. Is it correct that "pre-render" is only good for a quick snapshot of the project status? I was optimistic that "pre-render" would let you work with lower quality files for building the project, and then you could do a full render later.

Looking at the eugenia website, it looks like the two other options are rendering all the source to .AVI or using "proxy" files (which is what I had hoped the pre-render would do.

Anyway, am I missing anything? Are there any hardware codec's which can use the vido card? Do the default codec's use both cores?

Not to be replying to my own posts, but here is a codec which claims to have some level of hardware support:

http://www.coreavc.com/index.php?option=com_content&task=category&sectionid=4&id=21&Itemid=59

Anyone know anything about it? Any other AVCHD codecs around that are better, or is it best to stick with the one in Vegas?

CoreAVC is fast, i have bloged about it, giving hard numbers. But vegas doesn't use coreavc for avchd, it's only for viewing on media players.

And if you don't have the money to buy a new PC, use proxy files:
http://eugenia.gnomefiles.org/2007/12/12/proxy-editing-with-sony-vegas/

Did you apply the suggestions I mentioned on the link above btw?

You still need a fast machine to edit avchd.

repled with Yes, I think it does need a fast machine.

C'mon ... there is no such thing ... "fast" .. as compared to WHAT??

"Faster" than MY machine? "Faster" than YOUR machine??

Fast means a modern desktop PC. Pretty much any desktop PC sold today is fast enough for AVCHD. As long as they come with 2+ GB of RAM.

And I offered TWO links with helpful tips about performance.

If you believe Pinnacle Studio, they recommend only Intel Quad Core for AVCHD (I checked, used to use pinacle and like their interface, but got tired of the crashes).

Eugenia, I did go through you website. Very nice, I got some good tips. I am new to the HD world, so it is good to have some references. I did apply your suggested changes.....it is still painful to edit because the preview window is so tediously slow. I edited a few files last night to see if it was "bearable" or not.

I also saw that Vegas Pro supports scripted proxy editing by using plugins. One of which is freeware. That may be a viable way to go since it eliminates a lot of the manual steps. I found some very cheap sources for either OEM version of Vegas Pro, or upgrade. In fact, the price approaches the Vegas Studio Platinum Pro full retail cost. Probably more than I need, but I am still using Studio Platinum 8.0, and was planning on upgrading to version 9.0 anyway.

I appreciate all of the responses.