I don't know if the second instance of Vegas is significant. I have done this before in earlier versions than Vegas 7.

I am picking clips for a wedding preparation edit from within one instance of vegas. I am copying them into another, new instance of Vegas. I can not get any effects to work in the second instance. I feel like I must have disabled something somehow.

Anyone have any ideas?

You may have "Bypass Effects" turned on. It's "Split Screen View" button just above the preview screen.