Hello,
I am currently using Vegas Video 3 and love it, but I plan to upgrade to Vegas 4 in the next few weeks, before Sonic Foundry's special upgrade offer expires on March 15.
Vegas comes with the Main Concept MPEG2 encoder, which is one of the best. Some people like to apply a touch of Gaussian Blur before doing an MPEG2 encode, in order to further minimize artifacts. There is a 5-page review of Vegas Video 3 at:
http://www.digitalvideoediting.com/2001/12_dec/reviews/cw_vegasvid3.htm
There is another Vegas 3 review at:
http://video.multimedian.com/reviews/vegasvideo3.html
There is a review of the new Vegas 4 at:
http://www.creativecow.net/articles/harvey_jim/vegas4_rev/index.html
-- seeker --