On the top of the video preview window there is a Save to File button. Click that to save the picture. What you see it what you get, so set the image quality to best and resize that preview window and make it as big or small as you want your still to be.
I didn't realize this before now because I always have the preview window set to Auto, but if you set the quality to Full you get the full sized picture regardless of the preview window size. If you want to create smaller stills then use Auto and resize the window to desired size. I've found this to work with all settings other than Draft, which results in a smaller picture even with Full selected.
This is in Vegas 4. I seem to remember 3 was different.
jetdv's link to his newsletter goes into more detail about field order etc. Check it out.
tocsese - If you haven't done this already, then give yourself a FREE Christmas present. Download the V4 Manual. It's great stuff, full of valuable info.