I set the full resolution rendering quality to Best. And when I started the new project I selected the template HDV 1080-60i (1440x1080, 29.970 fps)
I've tried a few different templates in the rendering window a few were for playback on a 3.0 GHz computer or better which mine is a little below that so I went down to 6 Mbps HD 720-30p Video.

I've rendered with the "Adjust size and quality for optimal playback" setting checked off and without it checked off and also with the media setting "Adjust source media to better match project and render settings" checked off and one without it checked off. The pixelation is still occurring. Although in the small areas where the pixelation doesn't occur I noticed in some of the clips I've rendered they are better quality than some of the other ones I've used with different settings. Not sure if this means it's the video itself that has pixelation but when I playback the original video that I'm trying to use in the project it is perfect quality.

I also tried to render in the Sony AVC setting which I had to customize it to save as an mp4 and Sony Vegas crashes every time I try to render in that setting.

I'm using Sony Vegas Movie Studio HD Platinum 10.0 if that helps at all. I know it doesn't have the GPU setting to turn off unfortunately for the AVC rendering setting.

The "adjust size and quality" setting only affects the preview window. It doesn't alter rendering in any way.

So you're seeing the problem in rendered output files? Are you *ALSO* seeing it in the preview window, and if so is it the same or is it different things being pixelized?

If you're primarily seeing it in the rendered file, make sure you're rendering to an HD template and are using a high enough bitrate to support the material. What bitrate are you using when rendering?

In your first post you said " I have this ripped dvd in high blu ray quality".

Did you actually mean that your source was a DVD? Unless it's AVCHD on DVD you're dealing with standard definition. No amount of processing with convert it to true HD.

Chienworks - yes I'm seeing pixelation in both the preview and the rendered files and in the exact same places. As for the bitrate I'm not quite sure how to adjust that but in the files I've rendered as tests, one had a bitrate of 15303 kbps, another had a bitrate of 6291 kbps. The first one obviously being higher quality than the second.

TOG62 - If I'm being honest, it's a utorrent file of a movie I'm using for this project and it said on it blu ray and high quality. When I playback the video file itself it is perfect quality no pixelation or anything. It only pixelates once I put it into a project on Vegas and then try to render a video clip off of it.

Sony Vegas doesn't work very well with ripped video. Asking support for illegally acquired files is like asking Sony to shoot in their own foot.