I had a little trouble with Video Vegas's render settings too. In the end I settled on 1700Kbps, 30fps at 720X480 (that was a mistake on my part...I wanted 640X480). I rendered to wmv...you didn't specify what format you wanted.
Eventually a 9:30 vid was spat out at around 90meg. The vid was Off Duty 2, so if you've got it on ya, just give it a quick watch (tee-hee...free advertising) and you'll see the quality. Any clips that weren't slowed down or sped up came out pretty nice. Ones where their length was altered did come out a little blurry though.
The first render I did, I had no idea what settings to put it on (being a first time Video Vegas user), so I just pumped everything up. Vid came out at 850, and the quality was terrible. Apparently though, this is normal and a second compression (say to DivX) would smooth it all out. Try going with the above settings and see how you go.