Add a track. Duplicate your video and align. Drop on cookie cutter. You can resize the opening and use either the pixelate or blur filter. If you need to track the area due to movement, you'll need to set key frames.

If you do a search for cookie cutter you'll probably find several threads giving more specifics. Comes up a lot. You can search Kelly's Vegas user site for some example. I wrote a brief tutorial over a year ago. If you search for BillyBoy on Kelly's site you should find it.

For more: http://www.wideopenwest.com/%7Ewvg/tutorial-menu.htm

http://www.vegasusers.com/vidshare/textdisp?billyboy-tutorial-4

Shows a more advanced use for cookie cutter but the principle is the same for what you want to do.