The toolset in Vegas is pretty much adequate for the task. Certainly with the addition of masks (which you can do manually in Vegas) more can be achieved and having motion tracking makes the task easier. For that you need to spend a bit more, either Combustion or Digital Fusion, neither of which are hugely expensive and give you a whole lot more than just color correction.
HOWEVER!
There's a HUGE limitation that isn't immediately apparent. Working with 8 bit video, probably sampled at 4:1:1 there's a very limited amount that you can push things around before you hit serious limitation of the medium. Do NOT expect to drop video from your handycam into a Lustre system and do to it what can be done with 14 bit film originated files. It's been tried and it don't work, duh!
That's not to say that you cannot achieve a lot with the Vegas or FCP or PPro toolset, you just have to understand the limitations imposed by what you have to start with.
Bob.

a great tool is combustion. Not as great as lustre, but same layout and tool design. I have done much on it. But the last poster is correct, its more about what you can do with the tools. Good tools are needed, but if you dont know how to use them or have the experiance in grading, you might get very frustrated.

Edit
oh, and by the way, some of the big benifits of lustre is that you can work in 2k and 4k film scans. You most likley are not going to be doing that, so if your serious about digital grading, combustion would be an affordable powerfull tool, that has a lot of other features that will blow you away.

ryon

skibumm101: Do you know how to do secondary color correction in Combustion? (like the one in Vegas, who also has an alpha control)
I find it aggravating that it doesn't have that. If it did, Combustion would be very nice.
Now you can get COlor Finesse to do secondary color correction, but the interface really annoys me since I'm used to Vegas.

2- On the Final Cut Pro side, there's Final Touch SD for $999 (needs a fully, fully loaded G5 so it's more expensive than you think).
It's more powerful than Vegas in some ways, and less powerful in some ways (the vignettes look wrong, which limits how far you can push them). Intergration with FCP is poor when I tried it, but things may have changed (FT changes very quickly).

It does have motion tracking, which rocks. But the vignettes limit you, which does not rock.

3- Anyways, Vegas is really nice for grading because:
A- It's free.
B- It's fairly fast. Integration is perfect, you don't waste time conforming stuff. Unlike Combustion, Combustion + Color Finesse, Final Touch (and presumably Lustre).
C- It's fairly powerful if you really sacrifice speed (rendering speed, and your time).

4- To do motion tracking in Vegas, it's probably best to export a clip into Combustion to generate masks. Import these masks in Vegas (with the multiply composite mode, and mask generator filter; read the manual) to get motion tracked masks.
*Ok, haven't tried this.
An alternative is to manual keyframe masks, which ain't that bad for short or simple clips. The masks will not stick perfectly though, which is not as good as motion tracking.

To do masks, just use the masking tool. Crtl drag to duplicate a clip onto itself. You do have to copy filters around or use nesting (if you have underlying corrections), which would be a pain in the butt.

5- To keep things in context: It looks like they are spending a significant amount of time on each shot of King Kong. For your productions, that may not be a luxury you have. If you're doing short films or commercials it would be worth it to do that level of details (and that kind of takes a lot of time to do in Vegas, but it's still not unreasonable; Final Touch is better).

For less complicated projects, then I would stay in Vegas because you can hack it to do what you want. Usually you get the most out of primary color correction (stuff that affects every pixel), and then secondary CC.
Going into masking and motion tracking is time-consuming and may not make a big difference in the final image.
For example: In the King Kong clip, the change to the eyes is very subtle and doesn't make that much of a difference. They actually have to zoom in to show you what's happening. If you compared the two images side to side, that kind of comparison will make the difference less obvious.