I am trying to capture video that was finalized on a Handi-Cam onto their DVD-R. What is the proccess to make the video useable? It is very slow and blocky. Is it a codec thing?

Any help would be greatly appreciated.

Thanks

You'd probably do best to convert it. If it was finalized on a handycam, it's MPEG 2. If your computer isn't relatively fast, it might not be able to decode the stream fast enough.
You've copied the data from the DVD to an HDD, right? You aren't trying to edit from the DVD itself, correct?
What do you mean by "capture?"
Use File | Import | DVD to import from a disc-camera

I am not trying to edit from the DVD. I tied to use a Handi cam to capture. It was unsuccesful aand then tried to just grab the VTO_S file right from the disk. I will try to import and see if that works. I have noticed that Vegas does not recognize my DVD drive. Do you knowhow to fix that?

To get the vob files off the DVD, use File - Import - DVD Camcorder Disc.