I note that in V8 in the "New Project" box, there is now, - "Pixel format" should this just be left at 8 bit for PAL DV widescreen ?

8 bit is how Vegas has always worked. If you change it to 32 bit, you'll no longer be limited to the 8-bit color space. This would be especially noticable on color gradients. There's been many discussions here of the new 32bit mode. Do a quick search and you'll find lots of information.