The information on Vegas Pro 8 indicates it can Burn Blu-ray disc from the timeline, don't know if it is 1080i or not. There are alot of folks using it to edit HD, so I think it can handle it fairly well. I usually down grade to DV, since I'm putting on regular DVD's. There is an option to write the HD file back to tape, so it can be viewed from the camera as HD. I like Vegas, and for the $140 upgrade price (good till Oct 31, 2007 for existing Vegas users), I'm very happy. Vegas is not for everyone, but I think for the price it offers a strong package. They have a very good forum on the Sony site at this link if you have any specific questions on what it can or cannot do:
http://www.sonycreativesoftware.com/...=543380&Page=0