The episodes you have were encoded using a lossy codec (presumably h.264). While not necessarily noticeable to our eyes, there is an amount of data loss. Hence the term "lossy." Our editing programs, Vegas in this case, are not good at decoding lossy codecs. This is why we need to change it to a lossless codec (huffyuv/lagarith), which doesn't have any data loss. Vegas will be able to read these files with much less difficulty which should make editing smoother.
Hope that helped.
