(I solved the problem as below, but I'm going to post this anway, since I put some effort into it. It may have some general value. Well, I still haven't found the answer to the burn question below.)
I wanted to capture a DV tape into Vegas. The display screen in Vegas showed at first an image I know was coming from my webcam, so I disabled the webcam. Then it displayed a single image of a waterfall. The capture image button was enabled. I got out of Capture, and re-entered. The waterfall image disappeared and replaced by a view of the camcorder tape. What was the single waterfall image all about? Where did that come from? I didn't recognize it from anything I did.

After capturing the tape, I thought I'd try a DVD by runing it through my camcorder. Again the still picture appeared in the display area of Capture, but this time I cannot get rid of it or see the images from the DVD when I play the DVD. What's up?

Isn't there someway to burn a DVD from a captured video stream?

Sony TRV-480.

Ah, I unplugged the webcam and the still image went away. I then realized my tape was still in the camcorder, so unchecked the enable DV conctrol from Preferences. When I started playing the DVD, the DVD showed up in the camcorder window, but nothing was active on the Vegas display screen. Comments? Solved ..

The USB cable was not connected. Well, off to discover how to disable the Logitech webcam w/o unplugging it, and my burn question above.