moleI have the same problems as a lot of other people in this thread. After lawena and virtualdub, my video in sony vegas is very choppy and of poor quality. This is really odd as I've used this method in the past, with my best looking video looking like this https://www.youtube.com/watch?v=mT0g4gcDZgU. I follow the guide except my lawena settings look like this: http://i.imgur.com/Jh8OazH.png. I have also tried recording with a higher fps, and with 1280x720. Higher fps just made the video way choppier, and 720p made it more smooth, but way worse quality wise. I'd be surprised if it was my hard ware not being good enough, since the video I linked above was recorded, rendered and encoded on the same computer, just a year earlier.
If someone knows how to fix this or knows a different way of recording and editing a video, then I'd very much appreciate your help.
What is the length/file size of the raw video file you're loading into vegas? Try encoding with a lossless codec out of VDub if you aren't doing so already. Also make sure you have "Preview>Auto" selected in the Sony Vegas preview window, anything higher will most likely cause the preview to be too choppy.