Ok, I'll try!
By the way, I have edited video from my iPhone many times Before, though it is a while ago. It is of course QT files. Somehow Vegas seems to have stopped handling these.

I read the forum posts I could find. Only one post actually pertained to my problem. Hope I didn't miss out on something else.
Anyway, I downloaded Handbrake and converted the iPhone videos and it did the trick. Turned them into mp4 and Vegas swallowed them.

Anyway, that's not the way Vegas should be, is it?

Is there any other solution to it?

"Anyway, that's not the way Vegas should be, is it?"

Don't blame Vegas - Blame Apple. As long as the video opens in FCP, Apple could care less how files work in other NLE's. That's why many of us are loathe to ever "update" Quicktime every time Apple releases a new version.

Martin, try uninstalling Quicktime and installing version 7.6.2. Please let us know if it helps.

Thanks for suggestions. I haven't changed QT version yet. I have contacted Technical suppport and await their response first.
Another thing I found in the Knowledgebase was that you can change the file name ending on each video clip to .mp4 (instead of .mov) and Vegas accepts them readily! I tried that afterwards and it seems to work. It is a hassle though to rename each file if there are many of them.In this case it was just around 15 clips so it didn't matter much.

But, again, it is a hassle and it would be welcome to have a more convenient solution.
I'll get back and relate what Sony replies to me.

There are free utilities available to batch-rename files...

Really, 3rd party software, or within Vegas?

SCS Supprt replied to me suggesting I update to the latest version of QT, which I already had done but which didn't help. So let's see if any other suggestion will come.

You can use the command-line version of ffmpeg to copy the video stream and convert the audio to AAC with a line something like this:

ffmpeg -i infile.mov -c:v copy -map 0:0 -map 0:1 -c:a libvo_aacenc -b:a 128k outfile.mp4

I'm just learning how to use ffmpeg myself so I can't give too much more detail! The converted file will have the original h264 stream and an AAC audio stream, and Vegas recognises this as "Sony AVC". This avoids the recoding of the video stream and just adds a new wrapper.

Thanks for the tip. I feel it is tiresome to go to different 3rd party software just to get files working on the timeline. Vegas should swallow it whole.
Anyway, I got response again from Support which, as someone on the forum also said, advised me to roll back to QT v 7.8 which seems to be more stable for many customers. So I'll try that next time I need iPhone video in a Project.

Everyone should realize that Vegas Pro is quirky with anything from Apple. An mp4 from Apple is not the same as one from a Sony EX3. Any Apple format should be converted before it is used with Vegas Pro. Experiment with high bit rate avi's, different frame rate mp4s etc. I have received mp4 files from i-Phones as well as movs and sometimes they work and sometimes they have to be converted to other formats.

I have seen many movs come to me in 24p, 30p, 12p, 16p and I would have to experiment with various frame rates in the render as settings in Vegas.