Neo Scene Low quality not compatible with Vegas?
 

For my recent project, which is only slated for web display, I decided to transcode all the 5D2 and HMC footage to Low quality.

Editing was fine and there was sufficient image quality for my target output. However huge problems while rendering out to Sony AVC codec. Vegas 8.0c would consistently run into the dreaded frozen rendering bug.. Time counter kept going but progress remained at 13-17%.. Tried replacing the clip but it was doing this with every clip.. Downloaded Vegas 9 trial and same problem.. except that Vegas 9 would report "low memory" error which makes no sense because my RAM was never maxed out...

Then re-transcoded all footage with Medium quality and now it renders fine...

What would be the difference between Low and Med quality settings to cause this problem?