Yep, I do it all the time. Does DVCam too! And Beta SP, D2, DigiBeta, Betamax, VHS, SVHS, 1", 3/4" pretty much anything you can get in your computer Vegas will edit.
Absolutely---it still gets captured as an AVI file--If you want to capture and edit DVCPRO/50 you will have to buy yourself a Panasonic Deck, firewire card and a the Matrox codec.