I have been downloading songs from iTunes and use them on Vegas with no problem, but I just updated to iTunes 9 and all the songs that I have changed from .M4a to .AAC extension which Vegas does not recognize.
Any idea how to fix this problem?

It is doing it on my machine also. The mpeg from itunes still works.
These are albums i own that i imported to itunes. I just recently upgraded to itunes 9 also.

This is on vegas 8

This is on the Vegas8, I do have an older machine that I have Vegas 7 on it so I downloaded the iTunes songs to it and convert them to MP3 and it worked, but that's really pain to do it that way.

Short of upgrading to Pro 9.0c which fixed this problem, see if the Sony Knowledgebase article titled MPEG-4 audio is no longer functional (http://www.custcenter.com/cgi-bin/sonypictures.cfg/php/enduser/std_adp.php?p_faqid=4787&p_created=1254146741&p_sid=4V9artWj&p_accessibility=0&p_redirect=&p_lva=&p_sp=cF9zcmNoPTEmcF9zb3J0X2J5PSZwX2dyaWRzb3J0PSZwX3Jvd19jbnQ9NCw0JnBfcHJvZHM9MTcmcF9jYXRzPSZwX3B2PTE uMTcmcF9jdj0mcF9wYWdlPTEmcF9zZWFyY2hfdGV4dD1pdHVuZXM*&p_li=&p_topview=1) is of any help.

As itunes music is now DRM free we always right click the song in itunes and click "Convert to mp3".

Vegas 9c sorts it but I just dont trust it :)

I then delete the original file and just keep the mp3.

Danny, that's not something I recommend doing.
You're taking an already compressed file and compressing it even more.
If anything, I'd load the file into Vegas and convert it to WAV format.
The resulting file will be much larger in size but you won't lose any quality doing it this way.

Short of upgrading to Pro 9.0c which fixed this problem, see if the Sony Knowledgebase article titled MPEG-4 audio is no longer functional (http://www.custcenter.com/cgi-bin/sonypictures.cfg/php/enduser/std_adp.php?p_faqid=4787&p_created=1254146741&p_sid=4V9artWj&p_accessibility=0&p_redirect=&p_lva=&p_sp=cF9zcmNoPTEmcF9zb3J0X2J5PSZwX2dyaWRzb3J0PSZwX3Jvd19jbnQ9NCw0JnBfcHJvZHM9MTcmcF9jYXRzPSZwX3B2PTE uMTcmcF9jdj0mcF9wYWdlPTEmcF9zZWFyY2hfdGV4dD1pdHVuZXM*&p_li=&p_topview=1) is of any help.

Thanks Mike for that link I will try that.
I do have Vegas 9, I have not installed it yet I heard so many horror story about it, that's why it's still in the box.