Ok, I might be being totally retarded here, but I've downloaded the free trial of Sheer, and am working with HDV and Sony Vegas 8.0c.
How do I capture as the Sheer codec?

Feel free to abuse my stupidity.

You would render using the Sheer (or any other) codec but capturing via firewire is simply a data transfer of the original material.

keep in mind that the Bitjazz SHEER codec is in an mov wrapper. That is, it's a subset of Quicktime.

Thanks for the replies.
To utilise the benefits of the Sheer codec with editing, I will basically have to import all captured footage, render it out using the Sheer codec, then re-import that and edit?

If you're on a windows platform, yes. If you're on a MAC, I beleive you can capture into the SHEER codec.