First off, let's get the terminology straight:

Rendering is the process of creating new video. This is required any time you add an fX, composite tracks, or generate media (like text).

Encoding is the process of changing the video to a new format, such as MPEG-1, MPEG-2, or WMV.

These can both be done at the same time, but the approach to speeding up Rendering is a little different than what you can do to speed up encoding.

To speed up rendering or encoding:

1. Get a faster processor.

2. ALWAYS render to a different physical hard drive. If your drive can read a certain amount of information in ten minutes, it probably takes even longer to write it. Since it can't both read and write simultaneously, if you render/encode to the same drive, you double this part of the time. By contrast if you write to a different drive, the reading and writing can take place simultaneously. If you have one hour of source DV video, this can save 10-15 minutes (or however long it takes to read 13 Gbytes on your computer).

3. Make sure you have some number other than zero set for RAM preview (you'll find this under Options -> Preferences -> Video tab). There aparently a bug that slows rendering when this is set to zero.

4. Be careful with parent/child compositing relationships between tracks because there is a bug in Vegas. If you have a parent/child compositing relationship set up between two tracks, AND if the composite mode is set to something other than the default ("source alpha"), then Vegas will render the video for the <bI>entire timeline, not just on the portion where there is actually video on both tracks.

The solution is to render, to a new track, each place where there is real compositing, and then when this is done for each composite, delete the parent track and thereby eliminate the parent/child relationship, and then render the whole project. It requires some additional work, but it can dramatically reduce the overall render time. Hopefully Sony will fix this in the next release.

For Rendering Only.

Use network rendering. This involves installing a portion of Vegas on multiple computers, and then having Vegas automatically share the render, over the network, amongst these computers.

This unfortunately cannot help you reduce the time it takes to encode (for instance to change an AVI file to MPEG-2), but it can make a big difference in the time it takes to render a complex project.

Unfortunately, the current version of Network Rendering (Vegas 5) is quite stupid in that it requires that all the pieces that have been rendered by the various computers be "stitched" back together, a process that negates some of the time saving. The longer the playing time of the project, the bigger a problem this becomes. Where network rendering really shines is when you have a short project (e.g., ten minutes) that has a HUGE amount of compositing, fX, etc. and which is taking 50x real-time to render. In this case, the size of the finished file will only be a few GBytes, so it won't take much time to stitch. If you can hook up three computers, each of equal power, so you have four computers total, you can cut rendering time down to only about 30% of what it was before.

For encoding (to MPEG-2), don't use two pass unless your bitrate is lower than 5,000-6,000 kbps. It probably won't make too much difference.