Do you mean camcorder or still camera? If it's a camcorder, when you say you bought the wrong one do you mean you got one that records on mini DVDs?
The best kind of camcorder to get (well, on a budget anyway) is a MiniDV camcorder. These record on MiniDV tapes and have a firewire connection for transferring videos to and from the computer. Most any MiniDV camcorder you find will be compatible with Vegas.
I bought the Handycam DVD and I am unable to edit the DVD unless I purchase more.. and more software. I wanted this to be easy. I will sell the DVD camcorder on ebay and hopefully get my moneys worth.
Are you using a camcorder that uses MiniDV tapes? It writes to a mpeg file? What is a model that I can look at?
There are a number of different types of miniDV cameras, and it all depends on how much money you want to spend. MinDV cameras do not "write" to MPEG, the format stored on the tape is call Digital Video and it is not nearly as compressed as MPEG.
Once you use your camera to video what you want, you then capture the video from the tape in the camera to an AVI file on your PC which can then be edited with Movie Studio. Once edited, you render the file to MPEG to use when authoring a DVD.
You will definately want to capture through firewire, which means you'll need a firewire port in your computer and a firewire cable. If you don't have them, you can pick up the card and cable for probably less than $25. Even on the shelves at Wal*Mart you'll spend less than $40.
To capture, connect the camera to the computer with the firewire and launch the capture option in Vegas. You'll see camcorder controls for playback, pause, fast forward, etc. right on the screen. Cue the tape up to the part you want to capture and click the Capture Video button. Click Stop when it's done. You'll end up with one or more AVI files on your hard drive containing the video clips. There are lots of other options to play with that you may or may not like, but basically it's this simple. After capturing, drag the AVI files onto the timeline and edit.