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If you haven't done so already, please read Lesson One of the Vegas Movie Studio tutorial. These lessons are meant to be followed in a certain order for best results.
Okay, we learned in Lesson One how to convert some sample clips into good quality AVI or MOV formats, for editing in Vegas. We also learned a few of the basics of building a little music video. That was fun, but come on! You don't want to use clips from some fandom that you might not care about, you want to make your own, from your favorite movie or TV show, right? Well, we'll show you how to do that, by extracting video from your DVD. (NOTE: Even if the videos you plan to make don't have DVDs available—or you don't own the DVDs yet—please indulge me in this and find any DVD to use for this lesson. We'll cover the concept of converting downloaded footage to an editable format on the last page.)
If you followed Lesson One (and if you haven't, stop reading this and go there instead) you should have the Sony Vegas Movie Studio Demo, MPEG Streamclip, Quicktime (or Quicktime Alternative), and VLC Player. Or, perhaps you have some other version of Vegas (preferably version 6 or above). That works great too.
In order to get MPEG Streamclip to open and convert your ripped DVD's digital files (aka .vob files), you'll need a special plug-in. It is the MPEG-2 Playback Component (which requires Quicktime), and now is the time for you to consider buying it. (It's $20 USD.) But, you don't have to. There are several workarounds that will be okay. But if you can afford the $20, it's the easiest way to go. (Note, that link is for the USA Apple store. If you are in the UK, use this link to get the plug-in. If you're from another country, or do a search for your local online Apple Store and see where they're selling it.)
If you don't want to buy the $20 plug-in, go to MPEG Streamclip's site and follow the directions for uninstalling Quicktime and installing QT Alternative. I don't recommend this way because it can make iTunes "break" for some users. Proceed with caution.
If neither of these options appeal to you, then your third choice is to use VirtualDubMod and make Lagarith AVI files. The learning curve on VirtualDubMod is a bit steeper than with MPEG Streamclip, but it's not that hard. You'll see in that tutorial that it's harder to keep the audio track intact (I don't even bother) and the file sizes are larger than MJPEG. However, Lagarith is a very favored codec among Windows vidders and you may end up switching to it later anyway.
ADDITIONAL DOWNLOADS:
3ivX codec: A free version of this codec, which will allow MPEG Streamclip to recognize XviD or DivX AVI files (like the kind of videos you download off the Internet). You can convert these downloaded XviD/DivX AVI files to a better format for editing. (Remember, it's a bad idea to try to import XviD or DivX files directly into Vegas.)
AMV App: You'll be installing this suite of bundled (free) apps if you opt to use VirtualDubMod, but you still should have it even if you're currently going to use MPEG Streamclip. The AMV App will automatically install the DVD ripper you will be using, as well as some codecs that will come in handy later. The installation process is a little confusing (a lot of things flashing up and multiple apps being installed). Don't worry too much about it, just follow along and agree to everything, and it'll install just fine.
Remember that true "editable" codecs (like MJPEG AVI and DV AVI) take up more disk space. This is normal for editing-friendly types of video files. Expect to use up to 1 GB per 5 minutes of footage. (With MJPEG you can get that down to a smaller size by fiddling with the quality settings.)
Editing with smaller sized video files (like those movies and episodes you sometimes find online) are not recommended. They often make Vegas crash, freeze, give weird error messages, and are responsible for lowering video quality. This tutorial covers the different kinds of video compression used in AVI and MOV files (some are good for sharing on the web, some are for editing) and this tutorial is a semi-rant where I talk about how many vidders complain of their software crashing. (It's almost always due to using the wrong kind of codec!)
A lot of vidders buy external Firewire or USB 2.0 hard drives to store their video files for editing. These drives are very inexpensive today and are worth it because by using the larger-sized "editable" files, we save ourselves time and headaches down the road.
Remember, most commercial DVDs can be up to 7 GB in size. When you rip a DVD to your hard drive, you'll need to allow for this space, as well as the space needed to convert the DVD over to editable clips. (You can always delete the DVD rip after you've finished converting all the files you need.)
To rip your DVD, follow this tutorial on the FoolishPassion fan video forums (no membership required for this particular tutorial). Follow the tutorial for DVD Decrypter. You should have DVD Decrypter, because you've installed the AMV App.
If you're using MPEG Streamclip, follow along with the instructions on how to make MJPEG files. If you opted to use the VirtualDubMod/Lagarith method, then skip down to the section on this page titled "Preparing for your first real fan video project."
Now that you've ripped your DVD, you're going to open it in MPEG Streamclip, find the scenes you want to convert to MJPEG AVI or MJPEG MOV (remember, versions 6, 7, or 8 of Vegas will use MJPEG MOV). Because I've already written this tutorial on another section of the site about opening VOB files in MPEG Streamclip, I'm going to do a brief, bare-bones overview of it here.
Start up MPEG Streamclip. Then go to "File >> Open Files" and locate the spot on your hard drive where you have saved your DVD rip. Navigate to the "VIDEO_TS" folder. You will notice that there are a lot of files in this folder, and not all of them will be useful to you. What you're looking for is large-sized files with the .vob extension. Primarily, files that are about 1 GB in size (or several hundred MB). Smaller files (like 50 MB, 100 MB) are not going to have what you want.

This is a Mac screenshot, but the Windows version looks pretty much the same. . .
Click to open one of the large .VOB files. (NOTE: If your DVD rip is of individual TV episodes, you might have to hunt around before you find the particular VOB file that contains the episode you're looking for.) MPEG Streamclip usually recognizes that the VOB file you've selected contains only part of the film or episode that you want to open. So it offers to join the rest of the VOB files that "belong" together.
It's asking you if you want to open the entire episode or film? Usually, the answer is YES!
Unless you have a specific reason for not doing so, click on "Open All Files" and wait for MPEG Streamclip to join all the files together to make one episode or film.
Sometimes (but not always) you'll get a message about "fixing timecode breaks."

If you get this message (sometimes you will, sometimes you will not) click on "Fix Now."

Then you'll get this message. DO NOT CHECK THE BOX. Then click on "Proceed."
Wait for MPEG Streamclip to finish fixing timecode breaks (or just joining all the VOB files together to make a whole program) you're ready to go!
Okay, now you have an episode or movie from your ripped DVD loaded into MPEG Streamclip, and you're ready to convert a selected scene to a MOV or AVI file. We're going to follow the same guidelines that we did in Lesson One, when we converted some small downloaded clips, using the MJPEG (Apple Motion JPEG A) codec. To refresh your memory, you can go back to that tutorial now and review the settings you must use, but here's a brief overview, plus some added details that you may need to know.

In MPEG Streamclip, go to Export to AVI (for Vegas Movie Studio 9) or Export to Quicktime (for Vegas 6, 7, or 8).
As before, choose a quality setting of between 60-100%. (I recommend 90%—100% looks great but the file size gets very big. You can even go down as low as 40% if you need to save a lot of disk space.) For audio, pick "Uncompressed." If you know you won't need audio in your clip, then pick "No sound." (Making audio-less clips can make things go faster when editing a fan video.) NOTE: For this particular project, it is strongly recommended that you pick NO SOUND.
It's time again to talk more about ASPECT RATIO . . . Under the "Frame Size" heading, you have a lot of choices. What you'll need to know before proceeding is, what is the aspect ratio of your DVD? If it's a recent film or TV show, it's almost certainly 16:9 or widescreen, but you won't know for certain until you confirm it. The easiest way is to review this short YouTube tutorial on identifying your DVD's aspect ratio. (The technique showed there is low-tech, but it works!) Also, it would be good to read this small tutorial on aspect ratio.
As it says in the above screenshot, if your DVD is 16:9, select the frame size numbers with [16:9] by it. If your DVD is 4:3, then select the numbers for [4:3]. If you want to use a smaller frame size than what is given to you there, go to "Other" and pick 640x360 for 16:9, or pick 640x480 for 4:3. If you pick one of these custom smaller frame sizes, make sure to click on the Better Downscaling box (one of the check boxes on the right side in the above screenshot).
: 
Weird "comby" lines.
The "Deinterlace Video" checkbox: If your DVD has these weird comby lines that show up in some spots (especially during scenes with more action or motion) then your video clip needs to be deinterlaced. Check the "deinterlace" box (right-hand side). Do not choose to deinterlace unless you actually see interlacing in your video. Needlessly deinterlacing degrades quality.
Okay, now that you've selected all the right options, ticked all the boxes you needed to tick, it's time to convert over your clips.
FOR THOSE EDITING WITH DV AVI FOOTAGE: If you discovered in the first Vegas lesson that your copy of Vegas cannot recognize the MOV or AVI files made with MJPEG compression, you have probably followed this tutorial for making DV AVI files. These DV AVI files will work fine in Vegas for this tutorial as well. (But make sure to consult the Vegas DV AVI tutorial because it gives special instructions on how to set up Vegas so that the clips don't have black bars on the sides and the faces won't be all squashed or squished.) For more information on processing your DVD as DV AVI, consult the "Trim that clip!" tutorial.
These lessons have been written in part for those who are very new to fan videos. Because of this, I've decided to stick with a "lesson plan" structure, which means I'm going to give you an "assignment." If you are already experienced in fan videos, you can disregard this "assignment" and just make a video the way you want, and still follow along with the tutorial's instructions about Vegas's various features. But for you newbies out there, here is your "assignment" for your First Real Fan Video Project.
If you have never made a fan video before, here are the guidelines for your first project:
Okay, now that you've prepared your clips and know what kind of video you're going to make, let's open up Vegas and start to build that video!
Page Two: Trimming and editing your clips in Vegas; getting music from iTunes into Vegas >>