Did some more research. Found that the AVC created by Vegas Pro 12 itself have these artifacts. I rendered a very small segment (about 360MB and it looks OK. If I increase the amount of video to render (full length is 15GB for AVC and 9 GB for MVC), I get these artifacts. I tried to make segments of other sizes - still have an issue with a smaller 6GB AVC output file.

Are there any settings for overcoming any large filesize limitations? Could it be something to do with windows paging ?

My project properties in Vegas Pro settings are at http://manishved.smugmug.com/Vegas-Pro/i-Q2RKXdX/0/X3/Vegas_Prop-X3.jpg

Please note that this is a clean install of Vegas Pro 12 + DVDA Pro 6on a brand new Windows 7 64-bit system.
Core i7/3770
16GB RAM
Intel 530 SSD

This seems to indicate some sort of resource issue.

So have you output a test DVD or BluRay yet to see if these artifacts are on the finished piece and are not merely a playback issue within DVD Architect?

Also, you still haven't told us what your DVD Architect project properties are. Your link shows me a screen capture of your Vegas project properties.

Well, as per my previous post, after the video was rendered in Vegas Pro 12, I created a new project in Vegas Pro 12 itself. Imported this rendered file and it has the same issue. So it looks like the problem is during encoding - not decoding.
Interestingly, even after using Render As -> Sony MVC 1280x720-60p, 25 Mbps video stream Template , while importing it shows as MainConcept AVC/AAC

General
Name: medha_intro_final.avc
Folder: F:\M\test
Type: MainConcept AVC/AAC
Size: 43.62 MB (44,667,290 bytes)
Created: Thursday, January 02, 2014, 10:05:52 PM
Modified: Thursday, January 02, 2014, 10:41:07 PM
Accessed: Thursday, January 02, 2014, 10:05:52 PM
Attributes: Archive

Streams
Video: 00:01:06.900, 59.940 fps progressive, 1280x720x32, AVC

ACID information
ACID chunk: no
Stretch chunk: no
Stretch list: no
Stretch info2: no
Beat markers: no
Detected beats: no

Other metadata
Regions/markers: no
Command markers: no

Media manager
Media tags: no

Plug-In
Name: mcmp4plug2.dll
Folder: C:\Program Files\Sony\Vegas Pro 12.0\FileIO Plug-Ins\mcmp4plug2
Format: MainConcept AVC/AAC
Version: Version 12.0 (Build 770) 64-bit
Company: Sony Creative Software Inc.

I have been up most of the night and researched several forums - someone suggested renaming incorrect folders in the FileIOPlugins folders. Tried to rename compondplug to compoundplugX - still the same results....

I am on the latest 770 release.

Used Sony MVC encoder and changed the

I'm sorry. We just don't seem to be communicating. You keep giving me answers to questions I'm not asking.

Maybe someone else has some suggestions.

OK - here's a quick summary.

Objective: Create a 3d bluray from a video captured with Sony HDR-TD20 camcorder.

Steps I followed:
Set the project properties in SVP 12 as per the screen shot.
Imported the video and using "Render As..." created the .avc and .mvc files using the Sony MVC 1280x720 60p 25MBPS Template.

Next, set the DVDA Pro 6 with the project settings set to BD 50GB, 1280x720, 60p, 25MBPS
I imported the AVC file into the timeline and saw lots of Green blocks.
I thought that the issue was with DVDArch Pro6's decoding process (maybe a wrong codec, etc).

To validate if the rendered AVC was inded OK, I created a bran new project in SVP 12 and imported the same AVC. This also produced the exact same results as with DVD Arch6 - media was not correctly displayed on the timeline and preview.

I also tried to directly create an ISO from SVP 12 (without using DVD Arch 6) which also had the artifacts.

So I presume that the video is not correctly rendered in SVP itself and any issues related to DVD Arch is ruled out.

Next, I rendered a very small region of the same footage (about 360MB) and that worked perfectly fine.

So the question is why does vegas not render the entire video correctly?

FYI: My disc volumes are NTFS format.

.

After several attempts, I am able to successfully load and also create a 3d bluray in DVD Architecp Pro 6. Unfortunately, even though the disc is indeed 3d (as per the info on Playstation 3), the video is played back in 2d. Any help will be appreciated....