There are two issues: 1) the MP4 format. 2) the copy protection that is on many MP4 files including bought iTunes files. Even if you had the codec to read MP4 files, the copy protection would "protect" the file from being used in Vegas. I just deal with this by burning my MP4s to CD, then ripping the audio off the CD. I'd love to know a better way though.
Let me clarify. MP4 does not have protection. Itunes .M4A/.M4P can have protection. Furthermore, MP4 is just a container that has an audio and a video stream.
If Vegas is wrote to open the container and demux the streams, then as long as you have the proper codecs installed, you could use these in Vegas.
There is a program: www.dbpoweramp.com called Music Converter that can decode MP4 to wav files that can be used in Vegas. I believe it works for unprotected Itune files as well. But if you are going to use Itunes protected files, the only thing you can do is burn to cd and then re-rip.
Personally, Im hoping to see mp4 container support along with H.264 AVC support in the near future.