Thank you for the reply. I have only had it for 1 week and trying to work out best options for workflow before I start a serious project.

For Vegas Movie Studio Platinum, even tho it's a 200.00 hit, it's WELL worth the $$ if you have a fast computer, to get the full version of CineForm and use that for capture.

Otherwise, I recommend this:
1. Capture hdv
2. Put to VMSP timeline
3. do rough cuts of what you want to get rid of.
4. Render those cuts to new tracks, rendering to DV Widescreen proxy. You won't have the benefit of the color matrix, but it's still very effective.

Edit, and in the Media Pool, manually replace the DV Widescreen proxies with the original media.