I have a short 10 second clip Im trying to drag into the timeline, and every time it says "an exception has occurred", then shuts down vegas. The wierd thing is, I just used the same clip on the timeline 1 hour ago! What could be wrong now?

Robert, A couple of things to try. If you are using a PC. Reboot the computer to clean up the memory or Ctr-Alt-Del to get to task manager and then processes, Right click on Vegas and set the priority to a higher level. That might allow Vegas to hog the CPU time and make the transfer work..
I've done one or both when I have Vegas start to glich. Works sometimes

Sony Vaio 3.2GHz, 1G ram P4 processor.

which version of Vegas, and which version of QT?