I would like to take a video file out of a prepared folder and re-edit it. I tried to bring it into vegas 5...but only the video imports and not the audio. Am I doing something wrong or is this just not possible?
The audio is in AC3 format. Vegas does not have an AC3 decoder (only an AC3 encoder).
If you don't have the original audio, then you'll have to extract the audio from the VOB with another tool and convert the audio to a format that Vegas understands -- WAV, for example. There is a free program called AC3 Decode that will do this.
Or you can do this:
Go to www.videohelp.com and search for BeSweet. Read some tutorials there before you try to use this excellent too. There can go from ac-3 to WAV. Drop the wav file on Vegas timeline and edit whatever you want. There are other options such as Goldwave (it's not free). BeSweet is freeware, though.
;)