Time Lapse
 

I would like to know best way within Vegas to do time lapse

Hugh, have you already shot the footage? I would think it would go like this...for time lapse of a sunrise you would run the camera for an hour or for as long as needed in a static position then speed up the clip on the Vegas timeline. I just took an hour long clip, speeded it up by resizing with control key held down, then added a velocity envelope. However it was still about 7 mins long, probably not as fast as you need. Maybe it could be rendered into an .avi file and then reintroduced to the time line and another velocity envelope used...but then you've got that extra instance of compression that will lower the quality.

Yes, you can get up to 12x by combining the Velocity Envelope and Playback Rate (i.e. CTRL-Resize) as mentioned.

If you need more than 12x, either render it out, add that clip to the timeline, and repeat the above OR save that as a separate VEG file, add the new VEG file to a new Vegas timeline, and repeat the above (which will eliminate the intermediate render).

Not shot....
 

And if you haven't shot the footage you might be able to make use of your camera's Timelapse (or interval recording) setting and save lots of hassle in post.

I shot a sunrise once and it was a pain working with the footage in post. I did the whole combine playback rate with velocity envelope. It did the trick, but Vegas is not intuitive when it comes to choosing what portion of an already speed up clip you get when you only want some portion in the middle.