MAsking is is probably your best bet. It might look better if you masked top and bottom so it doesn't look odd.
If it's from an analogue source then time base correction may cure the problem although it sound more like a head switching issue which a TBC will not help.

EDIT:
Looking at it I don't think a TBC will help, looks like head switching, mask it out.

Thanks for the reply. I just started using Vegas and I searched for "mask" on the online help.
It instructs me to choose Multiply (mask) and the entire clip turns black.

How do you apply the mask only on the top and bottom of the clip?

I think that by the time you've finished "editing" and print out to tape this will have been lost in the underscan areas . . masking? Well maybe you don't need to do it. I've looked at your footage and this is typical of the type of bottom edge stuff I used to get when I used an analogue cammie.

So, edit a bit and then "publish" to what media you are thinking of doing. If isn't there . . BINGO! - If it is then mask away. Several ways of doing this. One way is to make a transparent 4:3 window on the track ABOVE all your tracks .. i.e. make it Track 1 . . and you will have "obscured" the offending mess .. yeah? But firstly I'd go with just seeing IF you see this stuff in a final publish platform. IF you are going play WMV files on a PC then yes, mask away. If you are going to output to VHS tape I think you wont see it and therefore masking would be unnecessary . .. yes?

Answering your question .. "How to correct a "static" . . " . . well you can't, it is there. Actually what type of cammie are you using? If it is analogue then I lived with it, until I got my DV.

Grazie

Garzie et al,
be careful, you certainly are unlikely to see right to the edge of the frame on most CRT TVs, LCD and plasma maybe a different issue, I've been caught out this way. Also if you're going to DVD the jittery bit at the bottom is wasting bandwidth.
Simplest mask is to use the Border FX. Other way is to put black frame (Generated Media) on track(s) above your video and then use event pan/crop to move them so just the bit you want to hide is hidden.
Bob.

Or... Just zoom in a tad using the Pan/Crop funciton. The advantage is its quick, simple and the tiny amount you'll zoom in won't hurt anything.

I usually crop just the top and bottom. That way the image won't be resized so there won't be as big a quality or rendering time hit.

Bob, I said, "But firstly I'd go with just seeing IF you see this stuff in a final publish platform. IF you are going play WMV files on a PC then yes, mask away. If you are going to output to VHS tape I think you wont see it and therefore masking would be unnecessary . .. yes?" . .. you warned me - et al - "LCD and plasma maybe a different issue . . " . . .er, maybe I should have truly spelt this one out? However - Bob - is this "advise" also crook too? That if the final delivery is onto VHS tape and onto a TV. Tell me, Bob, if I see stuff outside the dotted safe area lines, then will this or wont this be seen on a TV? If so please inform and advise me.

The point I'm making is that if the final delivery WAS NOT anything digital - inherent in my comment about WMV - then going to ALL this trouble was unnecessary - Or have I got this wrong too? - Bob?

I'm with Kelly on this.

Grazie

Grazie: generally stuff outside the safe areas won't be seen. Evidence the fact that people watching VHS for generations have never complained about the static at the bottom of the frame even though it's always been there. However, as alternative viewing equipment becomes more common the safe areas will continue to expand and the invisible border will shrink. I for one would rather mask the garbage unnecessarily rather than risk having a client complain about it.