Ok, I have defragged C:, moved swap file from C: to another drive, optimized my bios, rendered to different drives and I still can't render the original rendertest.veg in less than 27 seconds. However, I can render John Cline's new rendertest-hdv.veg in 155 seconds. Go figure (shrug).

Ok, thanks, John. I had the wrong output file format. Duh! Original rendertest.veg now renders in 12 sec. That's more like it.

I have a P4 @ 2.8 ghz, will this be enough to run HDV (HV20 footage) smoothly with Vegas 7.0? As it stands right now, the footage can't run smoothly with Vegas 5.0 (my current system) so I'm hoping this is related to the version of Vegas that I have, and not my CPU.

Glen,
Vegas 7 handles HDV better than v.5, but I doubt you will be able to see enough improvement to make the experience better. My core 2 duo would edit it but not at full framerate in preview unless I went to draft mode. Putting it in Full (Best) would drag it to less than 10 fps. My quad core zips right through it with a single video track.

So in other words, I'm going to need a Quad Core machine to edit HV20-1080-24f footage the way I use to edit SD?

Editing four streams of HDV mixed with XDCAM quite regularly with full/usually full frame playback at Preview/Auto, sized to half rez. This setting has always been the recommended playback in previous versions of Vegas, and still is.
You can edit HDV quite easily on any dual core machine, assuming you're not running antivirus or other background apps. Dual 270 machine (dual dual core) is a great way to work, we've got 5 of these machines running, and all are HDV or XDCAM on the timeline, all the time.
Faster is better, but not necessary. If you've got a dual core system, you should always be able to achieve full framerate playback at Preview/Auto

Thanks Douglas, that's good to know. I'm only looking to have one HDV track on my time line at once, along with six to eight other audio tracks. I'm only going to be performing simple cuts, fades, dissolves and some color correction.

Well, I just put Vegas 7.0 on my system before upgrading my hardware, and wow, what a difference! The HDV actually plays smoothly without the need for a new processor!

Well, it actually only plays smoothly in a small preview window. Where as before it wouldn't play at all.

It's nice when you get a big boost just from software. Save your money and there will be some fancy new quadcore processors late this year. They may even be affordable early next year. The best news for me is that the new quadcore chips (Penryn?) will be the same socket as my Core2Duo and much faster.