Yo,
Recently in Vegas 3.0, when I've tried to capture something, it has been always dropping frames, and the .avi files that I've made with Vegas that used to work aren't working properly anymore (they all have the MC_DVD Video Compression). Can anyone here help me out?
You dropping a frames because of hardware (not enough power or capturing on HD where OS reside). Try capture and render as MPEG1 and see what happen.
If you have only one HD try to partition for OS and capture. The "swap files" will interfere with capture writting and you will drop some frames.
Are you capture as analog or digital?.