Could be easily done with Photoshop layers.

Put the gradient on an upper track (most likely a track with nothing else on it, except other gradients you want to use as masks) and the image on the track directly below it. Have the gradient fade from white, where you want to see the image, to black, where you want it to be transparent. Add the Mask Generator video effect to the gradient event, set that track's compositing mode to Multiply (Mask), and then make the track with the image a child of the track with the gradient on it.

This is all assuming, of course, that your version of Vegas Movie Studio supports the multiply compositing type and child tracks. I'm pretty sure that newer versions do.

Put whatever you want to be seen in the now transparent area onto any tracks below the image track.

Hi and thank you for your responses. I don't think I explained very well what I want to do. I currently use the gradient media generator to apply a thin strip of colour under text. This makes the text easier to see over any video. I create the strip using the Pan/crop tool applied to the gradient media generator.
Imagine one frame of video with this strip going from one side of the frame to the other. It starts at one side of the frame opaque so the colour shows. It progresses along the frame becoming more transparent until the colour disappears altogether at the other. I place the text above the opaque section.
I would like to do the same but have an image instead of the colour.
I hope I've explained myself better.
J

What i've described should work just as well, adding in track motion to resize and position the gradient to be just behind the text. However, instead of the color gradient you might find it easier to create a still image with the gradient in just the spot you want.

Thanks Chienworks. I tried what you suggested but couldn't get it to work. I didn't understand it much so that's probably why. I have managed to get some sort of compromise by using the Starburst preset in the colour gradient media generator and playing around with the settings. This gives me a nice colour gradient fading to transparent. Looks quite good too.
Thanks again everyone for your input, I appreciate it.
J