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I highly disagree with Philip Bloom's suggestions. 35mbps mpeg2 it simply has a MASSIVE quality loss over the original 40 mbps h.264 MOV files. I am very disappointed in him, because people take his word for scripture. If he had picked in that dialog ProRES I wouldn't be barking here, but selecting 35mbps XDCAM is just wrong.
So you can't just drag and drop the files straight into the timeline from the 5D?
What will be the likely workflow for the 7D?
There won't be the need to convert the framerate, but H.264 is not a good editing and CC'ing codec. So what might be a wise codec to convert to with Vegas, for Vegas?
But wouldn't h.264 be a bad codec to color correct with?
Or would you get the same quality output so long as you didn't render to H.264 a second time before the final render out?