You need to buy a video card, which will encode the video to Mpeg as it's recording. API, has many of these video cards. Also, I believe Vegas Video capture does not support this feature, I think you have to capture to .AVI using the video capture utility.....but don't quote me on that. So anyways, most video cards come bundled with software, that you can capture the video and supports the features on the video card. Basically, this is a hardware feature for your video card.