Asteroid-Man said:

Yeah ady it's greyed out. I can customize every other filetype and setting EXCEPT MPEG-II (no matter which Template I use)

EDIT: I'm using Sony Vegas Movie Studio Platinum Pro 9

Damn, that's not good. I wonder why it is greyed out? That means you can't alter the bitrate. The default bitrate sony used is 6000kbps average, 8000kbps max and if your movie is more than 3 hours you'll probably find out that your final render will be too big to fit on even a DL-DVD without audio.

I can't understand why your version of Vegas won't let you customise the settings. I have the exact same version, but don't use it any more because i was so fed up with all the crashes and other problems with it, i went back to version 7. It does sound like it hasn't registered the Mpeg plug-in properly and just giving you a limited setup, but that doesn't surprise me with v9. Buggy as hell. Half the time with v9 it wouldn't even show me any mpeg outputs as an option. It's a pity you can't import the project file into an earlier version of vegas. V9 could be the cause of the problem you are having with the drive disconnecting all the time too.