I already have the huffyuv codec installed and that's been working like a charm with my capture program Winfast PVR (alas it's not working properly when I've tried capturing with Vegas for some reason). Anyway, That might be the simplist way since I have plenty of hard drive space. I've never used AviSynth but I might try that route if worst comes to worse. I'll post later on this evening with whatever results come out of this. Any other suggestions would be great if anyone has any.

Originally posted by: Moth3r
The neatest way would be to use an AviSynth script with MPEG2Source(). Install AviSynth, and get the DGMPGDec plugin. Run DGIndex, open your M2V file, and save a D2V index file. Now in notepad, type the following:

LoadPlugin("pathname\DGDecode.dll")
MPEG2Source("filename.d2v")

Save with the extension .avs. Hopefully Vegas should be able to open this as if it were an AVI file.

Failing that, you could use VirtualDub-MPEG2 to load the M2V, and save out as an AVI. Use a lossless codec like huffyuv or Lagarith - but you will still need a fair amount of drive space.