When you use the import camcorder menu it takes a long time to import then another long time to appear in your media manager and you will notice it is building peaks which takes a long time. It is not a one second deal. If you dont' see it in the menu that means the DVD is copy protected or you don't have the latest Vegas 7.
"rename the VOB files to MPG and drag them on to the Vegas timeline."
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You have to be careful when doing this (as has already been discovered). A VOB is not EXACTLY a mpeg. It is instead a mpeg with the sound muxed.... bit of a difference. As a result you may not always get the audio (depending on the type that was used).
It is best to use a vob to mpeg converter... you can probably find one on