Spence seems to have found a good way to render a Lagarith avi from Vegas:
http://www.fanedit.org/forums/showthread.php?4668-The-FilmMachine-user-friendly-Mpeg2-encoding-software-using-HCenc
Haven't tried it myself yet. He's using FilmMachine...
http://members.home.nl/thefilmmachine/
...in combination with HC Encoder. I guess The FilmMachine creates the script for you to use in HC Encoder, so you don't have to do it yourself if you have trouble with scripts.