Forget what I said earlier.
I did a search on other Vegas forums and came up with this.
Thanks to Peter Wright and Kelly Chien for the tips and graphic.
Drop two clips on the timeline, no overlap.
Drag the top corners to create Fade Out for 1 and Fade in for 2 (try 5 frames each for a start and adjust up or down as desired).
Drop Iris transition onto both.
Set the first to Circle - Iris In
Set the second to Circle - Iris Out.
Place the following image on a new track underneath the clips, spanning the duration of the two fades.
http://www.vegasusers.com/images/shutterblades.gif
Adjust time to suit sound effect.
