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Hi Paul possible means to solve yourproblem
Copy your MPEG file to another folder to allow you to retain original in the eventanything with the following goes wrong. Then rename your newly created file by changing the file prefix from MPEG to avi. Import your new renamedavi file into Vagas.
A friend had the same problem with a Sony DCR-SR68E and the above fix works for her. Trust that helps, best regards.