The ultimate goal is to export from Vegas with as little quality loss as possible. So, in general, I recommend either an uncompressed .avi file, or an .avi file that uses a lossless codec like HuffYUV or Lagarith.
But if your source footage is DV, then exporting as a DV .avi from Vegas is fast, efficient and any quality loss it introduces will be negligible.
Once the .avi file is imported into Encore, you can set your chapter markers exactly where you want them. Encore will force a new GOP at the chapter marker when it transcodes the video.
If you already have timeline markers in Vegas that you want translated to chapter markers in Encore, the best you can do for now AFAIK is the pencil-and-paper export, noting the time of each marker.
yep that's better, i'm sure this has all been covered so sorry folks... last one for now, promise...
i have a movie with 10 chapters
i create a link to play the whole movie (just select 1st chapter)
i then create a playlist to play selected chapters BUT now the link to 'play all' plays the same as the playlist?
No. From where you are, it seems like the easiest thing for you to do is to give each chapter its own Chapter Playlist. That is, if you are trying to set up individual chapter playback with an automatic return to the menu when the chapter is finished playing. Link buttons to the playlists, and set the end action of each chapter playlist to go back to the appropriate menu.