What is the best settings for rendering in Sony Vegas 9.0 (The platinum version)?

I've been using the same method I use on my normal HD video's from my HV30 video's. I've noticed that when I use still's from my Nikon and render them out, I get this weird distortion in darker spots like night sky's and stuff.

here is an example

http://vimeo.com/1879819

You can see it when you make it full screen in the left side of the sky. This weird distortion thing happens. It's done that on every video I've made at night. Doesn't seem to do it on my daytime video's though.

Are you referring to the posturization noise? This is typically associated with high compression rates.