In addition to the post above, you'll find some useful information here:
http://www.sonycreativesoftware.com/forums/ShowMessage.asp?ForumID=12&MessageID=660127

If I were you I would obtain some clips from your intended purchase and test them first using the suggestions provided. Best not to be disappointed out of the box.

Thanks - based on your comments, I may avoid the Canon and go with the Lumix GH-1 which shoots 1080/24p, or 720/60p in AVCHD format (MPEG-4/H.264)..
I am making DVDs for clients that will be played on widescreen TV. Is the 1080/24P or 720/60P of any noticably less quality than the 1080i that the Canon shoots when viewed on a large format TV?

I have a Sanyo Xacti now that shoots at full HD 1080i and 720p mpg4 and I have no trouble editing the video in VMS, so maybe the GH-1's video would present less issues in VMS?

You're making DVDs? Remember that these will be 720x480, so the difference in source format won't make much difference in the DVD output at all.

Also keep in mind that the T2i shoots H.264/LPCM, which is AVCHD. It is just wrapped .mov instead of .mp4 (the two extensions are often interchangeable in this case).

Actually, as explained by an engineer on DVInfo a few months ago, AVCHD uses a higher profile h.264 version. The difference is not merely in marketing, certification, and container between the two, but an actual level/optimization difference of the h.264 codec. Some say (I haven't done any testing myself though), that Canon's 48 mbps VBR h.264 MOV codec found on these dSLRs is not much better in terms of recorded detail than AVCHD cams' 24 mbps. These dSLR/digicams use a less powerful encoding chip than actual camcorders, so they can't optimize as much at the same bitrate.

Anyways, I've written a tutorial yesterday on how to deal with dSRL/digicam h.264 footage on Vegas: http://eugenia.gnomefiles.org/2010/03/14/starting-up-with-a-dslr-and-sony-vegas/

"...You're making DVDs? Remember that these will be 720x480, so the difference in source format won't make much difference in the DVD output at all...."

What Im doing is filming my clients and then creating HD DVD's for them to play on their HDTV and PCs.

I want the output to be the of the highest quality and the cameras I am looking at purchasing (canon T2i and Panasonic DMC-GH1) both shoot .mov/H.264 encoded video. I just wanted to get the quickest workflow to use these cameras to shoot my footage and then use VMSPP 9 to edit and render the final files so they will be high quality HD when viewed on a large format TV.

Any specific suggestions will be SO appreciated as I need to decide whether to proceed with buying the combo DSLR or stay with two separate devices.
Thanks!! Eugenia - will check out your tutorial and ask any questions if I need to.

Still learning all of this as I am primarily a still photographer by trade.

HD DVD is a completely defunct format. There are no discs being produced and very few players in existence. I'm sure you meant Blu-Ray (BD), right?

o my gosh..now I feel a little silly - if a client wants to watch this dvd on their HDTV, what is the output I should use then? Should I not use 1080i? Should I just use 720p? Dont they need a blue ray player to play blue ray disks?

Most of my clients are seniors or older adults and they may not be "up to date" yet with moving from DVD to BluRay.

HELP!

if a client wants to watch this dvd on their HDTV, what is the output I should use then?
DVD

Should I not use 1080i? Should I just use 720p?
Neither. You should use DVD

Dont they need a blue ray player to play blue ray disks?
Yes. They would also need an HD DVD player to play HD DVD discs, of which there are very few left in existence.

Most of my clients are seniors or older adults and they may not be "up to date" yet with moving from DVD to BluRay.
OK, so give them a DVD.

90% of all households have at least one DVD player. Well-made DVDs play beautifully on HDTV sets. Don't overthink.

Dont overthink...that is the best advice I have gotten from anyone yet! :)

So let me ask this in a straightforward way - in order to get the highest quality output for viewing on a DVD Player and HDTV, what settings should I use in VMSPP 9 to render out my video shot at 720p/30fps or 1081i/24fps with the Canon T2i DLSR? Could I get just this information (Properties settings and render settings or template to use?) and I will play with it when the camera arrives.

Thank you to everyone who provided me with guidance!

1) Render the video using the DVDA MPEG-2 template.
2) Render the audio using the DVDA AC-3 template.

Pull the MPEG-2 file into DVD Architect.
The AC-3 file will follow assuming it is named the same.
If it is not too big to fit, DVDA will prepare your DVD video without re-rendering.

You seem to be a bit confused about the DVD format. The DVD format is standard definition, not HD> It is very specific and the templates in VMS will produce a compliant DVD.
http://en.wikipedia.org/wiki/DVD-Video

This information is also available in the help and tutorial that came with your program. Good luck!

If they have only a DVD player connected to their HD TV and buying new hardware is not an option, then the best you can do for them is an SD DVD. If they have a Blu-ray disc player connected to their HD TV, then you can provide (high definition) Blu-ray discs (assuming you have a Blu-ray writer in your computer); if their Blu-ray disc player supports AVCHD (probably all Sony and Panasonic Blu-ray players do, I'm not sure whether any other manufacturers do) then you can also provide (high definition) AVCHD DVDs (and you only need a DVD writer in your computer).

Actually, there may be another option: some HD TVs have additional input ports, such as a SDHC flash memory port. If so, then you may be able to record something such as AVCHD onto a flash memory card. That is an expensive approach and consequently not generally viable except for limited-run showings (in other words, erase the content to reuse the flash memory again).

Anyway, the highest resolution SD DVDs can have for their native resolution (in NTSC countries like the USA) is 720x480, and in PAL countries is 720x576. However, you can store your SD video anamorphically within that resolution to provide either widescreen 16:9 or fullscreen 4:3 aspect ratio. For best results, use the same aspect ratio that your client's HD TV has (assuming your source video was shot with that aspect ratio).

If your clients have a Blu-ray disc player, then the highest resolution you can provide is 1920x1080, whether on a Blu-ray disc or on an AVCHD DVD. By the way, 720 lines of resolution is also defined as HD, and also requires a Blu-ray disc player. Whether you should provide interlaced or progressive video depends on what their equipment supports.

I just returned two AVCHD video cameras. The panasonic TM700 and the canon vixia. That codec will come in to vegas fine but it will crash your sytem often. Those raw files also after all the data processing to get it to work end up looking pretty crappy. I would stick with the canon T2i and just convert all your initial shots with a lossless codec (like lucerin). By the way, the t2i is only PROGRESSIVE frames. All the aforementioned cameras are interlaced.