For capturing: if you're capturing from DV or using an external analog->DV converter then there are no settings. If you're capturing from analog then capture to AVI using the same format as the MPEG that will go on the DVD, which is 720x480 (or 640x480 if your capture device doesn't support 720), 24 bit color, 29.97fps.
You need to render twice if you’re going to DVD-A; once for the video and again for the AC-3 audio. For the video render, select *.mpg and use the template DVD Architect NTSC video stream. Then render again for the audio and select *.ac3 and use the template Stereo DVD unless you’re using 5.1 Surround, then use that template. If you name the files the same, DVD-A will load the audio automatically when you load the video.
There is a known issue with using the Stereo DVD built-in template, your AC-3 output file will end up as 5.1, not stereo. This will be fixed in the next Vegas 4 update.
Here's the workaround:
1. File | Render As...
2. Set "Save as type" to "Sonic Foundry AC-3 (*.ac3)"
3. Set "Template" to "Stereo DVD"
4. Click Custom...
5. Set "Template" to "Stereo DVD Workaround"
6. Click the "Save template" button
7. Press Ok
8. Press Save
From now on, just use the "Stereo DVD Workaround" template instead of the "Stereo DVD" template and you should be fine.