From what I've observed, the higher spec requirement is based on what format you want to encode your raw HD footage to rather than the source. Choose a format suitable for the web and it's not an issue, but if you up the bitrate for the output then it makes a huge difference (and a Huge file!). I can't remember the specifics but I tried one piece and it was estimating 13 hours to encode it! I just upgraded the home PC to a quad core (because Vegas allegedly can use all 4) so will try some at the weekend and get some timings.
TR – I'll give that setting a try, thanks.