Vegas is nice for editing but it can't render to save it's miserable life. What I do is render out of Vegas as an ~~uncompressed~~ lossless avi (using a 3rd party codec because Vagas can't even do that right) and encode it into a MP4 with the free MeGUI.
Be warned however; MeGUI has to be one of the most user unfriendly apps I've ever seen and I used to use DOS based machines. You WILL want to read how to use it first. MeGUI is super powerful though. You can tell it the size you want the file to be and it will compress the footage into that size. Getting half an hour into 700Mb looks just fine so it should meet your goals.
EDIT: Mixed up uncompressed with lossless.
What I would try and do is use avisynth to frameserve the mp4 to virtualdub. One quick way is to use megui, click on tools, then use AVS script creator. Drop the resulting *.avs file into Virtualdub or VirtualdubMod. Then after deshaking in virtualdub re-add audio (not in virtualdub). If you have the space and you do not want to lose video quality during the deshaking process, use the Huffyuv avi codec to save the deshaken video. Happy encoding.
Video compression + Audio Track merging MeGUI http://sourceforge.net/projects/megui/
I found a few mentions in this reddit that are rather old, I use it to combine audio tracks with video tracks(I record Video+VideoAudio+Commentary as separate files) using the one-click option. I am looking into the more advanced features as one can probably get great results with it if used to the fullest.
If someone knows any tips or/and tricks for MeGUI I would like to hear about them.
I gotcha. But I think maybe you're smarter than you think—I'm sure you could learn how to rip to whatever standards with much less learning than you'd think. Nowadays, it usually boils down to making sure you've got the resolution, aspect ratio, interlacing/pulldown/etc., and perhaps anamorphic encoding (the most confusing part, in my opinion) auto-detected and/or manually set properly, selecting an encoding codec preset, and then perhaps tweaking a few things. The Internet is full of guides on how to do this. I'd recommend checking out MeGUI if you're interested. It sounds complicated, but it only takes a couple of minutes per video once you get it down.
Best video converter out there. Customize every detail about how you want your video converted allowing the absolute best quality for the lowest file size, also h264 encoding for psp, ipod/phone, ps3, 360, and more. (it's rare to find a video converter that doesn't use xvid for everything)
I know exactly what you mean, I have searched for a long time to find a good converter.
MainConcept Reference. Easy great interface, but also has complex advanced features. I think you can even download it for free, with out the use of certain codecs, but can always pirate it. Make sure to get V.2
Another great tool is MeGUI, it is extremely flexable (and free), and updates with all sorts of open source codecs, also works well with AVIsynth.