Vegas and Movie Studio programs support recording via IEEE 1394 (also known as i.LINK or FireWire). USB, which is not supported, often results in lost frames, missing audio and generally poorer quality.
If your camera is not being recognized, there are several things you can try doing.

1. Check to make sure the camera is being recognized by Windows
To find out whether Windows recognizes your camera when it's connected to your computer, follow these instructions:

1. Right-click "My Computer" and go to "Properties" > "Hardware" > "Device Manager". (If you are using an HDV camcorder, make sure it is in DV mode.)
2. Look under "Imaging devices" to see if your camera is listed.
   If you are using an HDV camcorder, and it isn't being recognized by Device Manager or is listed as something other than an AVC device, you need to update the camcorder driver.

2. Set the correct recording program
If you are using a normal Mini DV camcorder, and the video recording feature can't find the device even though it is recognized by Windows, you need to check to make sure VEGAS or Movie Studio are using the correct recording program.

1. Go to "File" > "Capture Video". When you are asked which program you want to use for recording, select your preferred program. (VEGAS Pro will not ask you which program you want to use).
2. Go to "Options" > "Preferences" > "Video" and enable "Use external video capture application". Click "Apply", then "OK".
3. Go to "File" > "Capture Video" again.
   Now, select the external video recording program.

3. Shared IRQ assignments
If you are using VEGAS on a desktop PC, you can try fixing the problem by searching for shared IRQ assignments.

1. To do this, go to "Start" > "Programs" > "Accessories" > "System Programs" > "System Information"
2. Click the plus icon next to "Hardware Resources", then click "IRQs".
   Your capture card (OHCI compliant IEEE 1394) should not be sharing an IRQ with any another card (such as a sound card or graphics card).
   If the IRQ is being shared with another card, you need to connect the capture card to a different PCI interface to change the bus assignment.
   If you know how to change the IRQ setting in the BIOS, you can also try doing that.

4. Multiple IEEE 1394 ports
If your computer has multiple IEEE 1394 ports, try connecting your camcorder to a different IEEE 1394 port. Disconnect the camcorder from your computer, and then connect it to a different port. 

5. Change the video capture mode
Changing the video capture mode may also help.

1. Go to "Options" > "Video Capture" > "Preferences".
2. Enable or disable (depending on the current setting) "Enable DV Device Control".
3. Click "Apply", then "OK".
   Now, try recording again.
   Go to the "Video Capture" video menu and make sure "Microsoft DV Camcorder and VCR" is selected.