If XP doesn't recognize it then Vegas probably won't either. If you connect the 1394 correctly, as soon as you turn on the camera it should pop up in Vegas.
...but incase go to options then preferences in vegas then select preview device and select the OHCI IEEE 1394 option. Or just do the old fashion way reboot your computer and see if it works.
Panasonic told me today that the TI 1394 driver will not work with this camera, and to try a MS DV driver...which I did and it does not help at all....
This sucks.