edit: I have marked this resolved so it can just go to the bottom and die.
I'd rather not have to frameserve the video in but I don't get why Vegas can't decode common 4:2:2 color H.264 clips, or maybe I'm doing something wrong? They're in an MP4 container with AAC audio. Heck I can't even get it to decode RGB color in the same format.
Now clearly Vegas can output to 4:2:2 formats in some situations, but is H.264 one of them?
I do know it will work with MagicYUV but I don't want to deal with large AVI files for captures if it can be avoided, especially when I have to move an AVI from a video capture machine to the editing machine for instance.