I got a bunch of title graphics from a group I'm working with, and I had to run these all through a batch processor just to make them open up in Vegas, and I did nothing more than save them as .jpg again in the batch processing.
Nope, I can't open it in Vegas Pro 8.0c either.
Just a guess, but I notice that the .jpg photo in question has a Color Representation listed as "Uncalibrated" under Properties/Details. It's possible Vegas does not accept this designation. A Color Representation of sRGB works for me.