demultiplex (aka demux). Multiplex process joins separate video file (mpv/m2v) with audio (ac3/mp2/wav) into mpg or vob(s).
As Saltman mentioned: standard version of Vegas has not built in AC3 format read/write function, and you would need to purchase a separate plugin or I think better option would be to upgrade to 'Paltinum' version:
http://www.sonycreativesoftware.com/...=447&PageID=88
I can't find now any info on the Sony pages about the plugin - maybe it's obsolete. When it was available it costed around $200, nonsense...
Please note that if you import AC3 and you will make any kind of editing the file will be re-converted which means degradation as the format is lossy.
There is a free and very good AC3 import plugin for Adobe Audition / Cool Edit Pro. Thus if you want to edit a file it can be an additional solution:
http://www.vuplayer.com/audition.php
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