These are my settings for Sony Vegas Pro 9:
Audio Tab:
Mode: CBR
Format: Windows Media Audio 9.2
Attritutes: 192 kbps, 48hz, stereo A/V CBR
Video:
Mode: CBR
Format: Windows Media Video 9
Image Size: High Definition: 1280 x 720 (I am capturing at this size as well)
Pixel Aspect Ratio: 1.00 (square)
Frame Rate: 29.970 NTSC
Seconds per keyframe: 3
check Override default compression buffer (seconds): 3
Video smoothness: 100
Bit Rate
check Internet/LAN 3 M
Index Summary: Its good to put in a special name for the Template, and a summary, as you may be testing various settings and will need to go back to what works best for you.
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Biggest changes I have seen in the audio and video modes using the many options, are rendered file size and time to render and upload. I only make my videos HD enough for the "HD" label to show up in Youtube, I don't believe my audience actually wants to watch my videos in HD. Your audience may differ!