yes, Vegas has the ability for multi-track audio editing, and can render a 5.1 audio. to decode the AC3 into 6 mono wavs, there are a variety of applications, but a feww solution is BeSweet.
I use Vegas to edit and my process is generally:
- DVDFab HD Decryptor to copy DVD to HDD (without region coding, etc)
- gordianknot to convert to avi
- virtualdub & VFAPI to frameserve to Sony Vegas
-frameserve (via demugmode) from Vegas to CCE to render final video