For straight DV, it will be full quality. For sections that need rendering, it will be reduced quality UNLESS you pick "Good (full)" or "Best (full)". (at least this is my understanding)

My quality is to to best...but there are fx on the clips...it looks ok on the camera viewfinder and on the computer screen but lower rez on exteranl ntsc

It won't effect you render, only the preview. So if it is choppy, drop down to a lower quality, like preview or draft even. That will get you a faster frame rate during preview.

For me, I lleve it on good (auto) and even with a lot of stuff going on the frame rate is acceptable. Again, one of those things, you get use to it after awhile and don't really notice the bumpyness. Remember it will only be bumpy during preview, not render.

Remember, "Best--Auto" will preview (even to an external NTSC/PAL monitor) at whatever resolution your Vegas preview window is sized to. "Best--Full" will preview at full resolution.

I find on my system, that the "Preview--Full" setting usually works best for external monitor use.

I find on my system, that the "Preview--Full" setting usually works best for external monitor use.
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You'll get better/faster framerates with the quality set at "preview". But remember that you won't see things in the true interlace signal that the final render will at good or best. Anything that produces the "recompressed" message on the RGB preview window while using the external monitor feature needs to be viewed at good or best to see interlacing. Important for checking jitter on stills, scaling, ect.
Prerendering or dynamic previews will get you up to full framerate when needed.

Craig H.