[George McCreadie] "So far its money* well spent
*=Not"
Perhaps you didn't understand my last post so let me say it a different way: You caused this problem.
Vegas Pro 10 has no problem with MPEG2 Transport Streams. I edit them all the time. It plays them perfectly right out-of-the-box. There is nothing special you need to do to make it work. You have caused the problem by installing the K-Like codec pak. This is not a Vegas problem. This is caused by your computer being messed up by installing a codec pak.
You can try uninstalling K-Lite and re-installing Vegas Pro and see if you can re-establish the Vegas codecs. Otherwise, the only other solution I know of is to rebuild the PC from scratch (i.e. format the hard drive and re-install Windows and never, ever , NEVER, install a codecpak again)
Just to give you an analogy: installing a codec-pak is like taking every pill in your medicine cabinet hoping that one of them will make you better... one of them might... but the others might kill you. It is never a good idea to install a codec-pak on a video editing workstation. You should always find the one codec that you need and install only that codec from a reputable source.
~jr
http://www.johnrofrano.com
http://www.vasst.com