I use the Sony HDR-HC1. I have successfully captured footage using VMS 6. Rather than upgrading to VMS 7, I upgraded to the full version of Vegas 7. Regardless, I don't use Vegas for capture--rather, the freeware utility, HDVSplit.
I have the HDR-HC1 too. I have been able to capture with VMS, but there is no video in the preview, just audio. The same thing happens with the Vegas demo.
I've had no problems capturing using VMS 7.0 - complete with video preview. (Incidentally, I don't get a preview with HDVSplit - but I've never really seen this as a problem, since I can monitor progress on the LCD screen)