I have found that editing MP4 videos in Sony Vegas is a bit sluggish as it seems to tax the system pretty hard (though it's an older system, it's still an i7 920 with 12GB of RAM). If I have the choice of editing MP4 or another format, such as AVCHD or AVI, I'll typically go that route. I don't know if anyone else has seen Vegas struggle with MP4 source files or not, but that's been my experience. My JVC records in AVCHD format and I have no issues working with those files in Vegas.

Exporting out to MP4 from Vegas hasn't been an issue though, but that's not what you asked.