"Green Screen" on clip.

[Daffy]

I'm going to guess it's a .m2ts file, Vegas should be able to decode AVC/H.264 files but does not have a demultiplexer (demuxer/splitter) for previous versions of Vegas.
You can download a program called "eac3to" and demux the individual audio and video streams from the .m2ts file and then import them to Vegas which should be able to decode them then.
And SuspiciousOne, if I see one more post like that from you I'm going to suspend you for as long as I feel like.

[Billy]

if video which you want to import to SV is in .wmv you need to convert it to .avi and i think that will work

[Squeak]

codec problem
it happens to me too when i want to put xfire-recorded stuff to sony vegas, after rendering u just can see a black shit

[__JREN]

vegas 7 is an old version and it might not support blu ray files

yeh, maybe this is the problem... With Vegas 9 you wont have this problem..