I would like to create an effect where traffic is travelling toward camera at a normal rate and then suddenly freezes and the goes backwardr really quickly, almost as in a time lapse reversed...is this possible in Vegas 6 ???
Yes. Use a velocity envelope to freeze and the reverse the action. Split the backwards part into a new event and Ctrl-drag the end to the left to "squish" it and speed it up. If this isn't fast enough, render that section out to a new file and replace the original event with the new one and squish it again.