De-interlace - none
Audio - 48,000mhz (DVD standard)
Motion blur - guassian ( you can disable the motion blur in your timeline, in the left hand pane on each video track it looks like several squares on top of each other, and you need to disable it )for your edit.
If you are working from a dvd source i have found it is best to rip the DVD to seperate .m2v file & audio files (make sure your ripper is set not to split files) then , if working with a PAL source, i use Virtualdubmod to convert the Video from Mpeg to avi using either the mjpeg or lagarith lossless codecs making sure that Virtualdub is set to fast recompress in the video settings and audio disabled. These will produce large files but you don't lose quality and Vegas works much better with lossless avi than it does with Mpeg files.
If working with NTSC then you will have to convert it with something like dvd2avi. In video settings set the field operation to "forced film) to remove the pulldown and colour space set it to RGB. then go down to clip & resize. change the video aspect to "free", filter type to "precise bicubic" and then move the height sliders full up so it has a video size of 720 x 480. then save avi and select your codec. it does split files but you can easily import them into vegas without having to join them first.
there are a lot more setting to fiddle with after you have set your initial settings but i have found it best to play around with different settings to help you become more familiar with what everything does.