From the little I know about SP2, it mainly tightens up memory management, addresses things like buffer overrun and memory leaks to prevent one app overwiting anothers memory. If Vegas is having problems in this area then it'll be good if the issues are fixed.
However from my experience these can be be very difficult areas to debug, oftenly the fault lies not with the code that you've written but the compiler. Add to that the difficulty of analysing what happened when in modern micros with their instruction prefectch and the Vegas team has my sympathy if they're wading through that kind of stuff.

Bob.

Running XP SP2 with no problems.
From what I have read until now here and at the DMN forums major problem appears to be capturing (PAL or NTSC) with some decks.
So far I haven't had any problems using (PAL) a Panasonic, couple of Sony dv, a digital8 camera and ADVC100.
In Sony's knowledge base there is an article about this issue that occurs due to the change of MSDV sys file and a workaround until Microsoft releases an update of the file that will take care of the specific problem.
About program freezes and problems in other areas that you mentioned in your post I haven't read something that sp2 installed systems commonly expose, except of the known issues that MS points out so I can't really say.
There will be systems where sp2 will work fine and other that it won't. Until we have more people using it is a little early to jump into conclusions. Issues can be system specific, user configurations or real bugs in the service pack that will affect all users regardless of system configuration.
An issue that is SP2 specific and only by installing it you can see whether any of your programs will be affected is what farss explained in his post regarding the changes in memory management.
As I said earlier personally I haven't had any problems with SP2 and I work with it few months already. (SP2 can be uninstalled from the Add/Remove programs)
If you want to read about the changes to functionality in SP2... It will be quite a long reading going through all sections 1-8
SP2

Bob,
I hear ya. I have tried Vegas in a variety of configurations on this mobo (ASUS P4C800 Deluxe) - with only XP SP2 installed with Vegas and no other programs or drivers (including printer drivers); with XP SP2 installed with other programs and drivers; with XP SP1; etc. The problems (for me) are usually the same. I can start Vegas the first time, but, as you said, it doesn't completely remove itself from the system resources it has used and will not start correctly a second time without a reboot. A reboot resets memory and Vegas will run correctly. Simply logging off the system and logging on again (either as the same or a different user) won't fix the freeze. You have to do a complete reboot. So --- what you said makes sense. Hopefully, Sony is working on this and that is why it is taking so long to release an update. There is talk of an update in April. Hopefully, that will be an interim update and not a major new release to a new version number (i.e. v6).

Thanks again to you and all the others who replied.

monteolsen1,
You probably already know about the twain_32.dll problem and fix but your symptom sounds very much like this issue. After opening VEGAS, check the task manager to see if wowexec.exe is running. If it is then it will still be running after closing VEGAS. The solution may be what I found as described in the following thread:

http://mediasoftware.sonypictures.com/forums/ShowMessage.asp?MessageID=284084&Page=0

It's a long thread so look for my handle. (Sorry I don't know how to point to the exact message). Ignore the reference to the Cannon scanner.

Blues