I captured some mpeg2 footage in vegas 6. Some of it appears red on the timeline yet plays normally in the preview window. What's going on here?

That means Vegas thinks there's a problem of some sort with the footage. Do a search here for "MPEG Repair" and you should find a tool that might fix it.

back in V7 days i had some 16mm transferred to HD (hard drive using black magic codec) ..
the clips would never play in V7 /V6 , got the red frames in TL ... they had no problem in combustion or AE ...
recently came across those HD clips and they play great in V8 ( no more red frames) ....