For some reason even after installing the packbit codec it isnt recognized by any other program other than dxtory. Please help as need this to be able to edit my videos.
VLC is a program which does not use a codec.
In the case of the codec that VLC does not support, it is normal that it cannot play back.
It maybe that vlc can not playback but Sony Vegas doesn't seem to work with it either
you are probably using 64bit sony vegas, right?
afaik there is only 32bit version of pacbit, 64bit software cannot access 32bit codecs.
a good alternative to packbit would be the dxtory rgb, UtVideoCodec RGB http://umezawa.dyndns.info/wordpress/?cat=28 (http://umezawa.dyndns.info/wordpress/?cat=28) / http://umezawa.dyndns.info/archive/utvideo/?C=M;O=D (http://umezawa.dyndns.info/archive/utvideo/?C=M;O=D) or Lagarith http://lags.leetcode.net/codec.html (http://lags.leetcode.net/codec.html). These codecs have 64bit variants which you are able to use in Vegas. :)