I have a Canon HV20, and I need to convert one of my M2T files to AVI. The conversion options are out there, but all of them render my video "jerky" or with severe "combing." Are there any free options out there for doing this? I have Vegas 7.0, by the way.

Try MPEG Streamclip (Mac and PC) or Virtualdub (PC only) both free. Vdub does a fantastic job decompressing and even resizing should you need to go from HD to SD.