Just a quick question here. Let's say if I want to insert pics from a digital camera on my video, should I convert the pixel aspect ratio (like in Photoshop, it has DV pixel ratio) first before it can be displayed on the TV with the correct proportion?
Just to give you another spin on it, Vegas handles aspect conversion automatically and assumes that your stills have a 1.0 pixel aspect ratio (PAR).
Anything you drop onto the vegas timeline is scaled to fit entirely in the frame. Always. So if you want it to fill the frame you'll have to either crop it beforehand or adjust it in Vegas (as Chienworks describes).
Stills that match the Vegas PAR conversion should be 654.5x480 (you can round up or down that half px). If you want a whole pixel dimension you can use 720x528.