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You misunderstand. I give an NLE the lossless or uncompressed AVI, I don't make it in the NLE. Your NLE is Vegas, mine is Premiere. Different program, same principals. Convert the video to lossless/uncompressed in VirtualDub.
All VCRs display the image in slightly different positions, yes.
When masking or cropping interlaced video, move 2 pixels at a time, not 1 pixel.
Sometimes tapes are recorded badly. In VirtualDub, you have to add a resize filter (do nothing for now), then "crop" the bad parts (2 pixels at a time!), and then go set the resize filter to "Letterbox/crop to size" for the full resolution pre-crop (720x480, for example). This re-centers the remaining "good picture" and then fills out with a black frame (the mask/matte).
To deinterlace for your stream, use the Yadif deinterlace option under the deinterlace filters in VirtualDub.
Give Vegas a pre-deinterlaced, pre-cropped AVI, and let it make the Youtube-ready streams (H.264 and/or FLV) from there.
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