I'm confused as to why the preview window in vegas 7d runs SLOWER when working with cineform files compared to .m2t files.

I have a dual core Sony Blu-ray laptop and I'm guessing the problem is the speed of the hard drive and the much larger cineform files?

Tony, I've run into the same situation with the Cineform files. You'll want to make sure your Video Preview settings are set to "Preview (Auto)" for best playback performance. Your disk drive speed (as you thought) may also be an issue. Vegas has done a serviceable job and achieving good playback performance on HDV files and I think the Cineform files are a notch behind in playback performance but offer other advantages.

I have a dual core Sony Blu-ray laptop and I'm guessing the problem is the speed of the hard drive and the much larger cineform files?
Yup. Takes a lot more disk throughput to do Cineform.