I edit in my video productions with Sony Vegas Pro 8, controlling audio volume, VST plug-ins with the mouse can get very annoying & tiresome - Is there a way to edit audio with an external hardware controller?

Yes, set up a Mackie Control Universal or some other external controller. Faderport doesn't work with Vegas though, that's a bummer for me. I also just ordered a Wacom tablet and am going to see how easy automation is with that since I can't afford a MCU. Also, I would assume a Behringer BCF2000 would work with Vegas in emulation mode.

Chris thanks for the feedback, that Mackie Control Universal looks great, exactly the kind of hardware I had in mind, shame about the price tag, will have to look at cheaper options. Would be great to watch a project play and edit it live having Vegas save all the settings, fussing with the mouse for hours gets really annoying and sometimes my hand even hurts.

The Behringer BCF2000 is cheap and Vegas has support for it.

Found this guide:
Notes on using a Behringer BCF2000 as an external Control Surface for Sony Vegas (http://www.whippey.eclipse.co.uk/BCFforVegas.htm)

Also a PDF layout:
http://sony-348.vo.llnwd.net/dspcdn/whitepapers/behringer_bcf2000_with_vegas_pro.pdf