Definately unintended, but I haven't been able to find anywhere in the preferences or advanced options of my version to stop it from doing that.
It only seems to happen so noticably on AH films though. 
It turns out my description from memory was rather poor. Though I'm using Vegas Movie Studio 9 so it may have changed in the newer versions.
Anyways, the way to fix it for me is to do the following:
Click in one of the video portions of one of the Fraps files in Vegas. Right click in the video portion of the Fraps file, then select Properties. There are three related options of which only one can be picked: "Smart Resample", "Force Resample", and "Disable Resample". By default it is set to "Smart Resample". Change this to "Disable Resample".
You must do this for every video file you put in your project. I've been unable to find a Vegas setting to set "Disable Resample" to be the default setting. If I remember to do that, I don't get the double-images. I think this feature is intended for home videos, its not appropriate for video game videos.
Also lately I've been having better results by using Vegas to encode to Uncompressed video and audio (AVI file). Then using another program to do the final encoding. I've tried a few, so far
HandBrake seems to be the best. Its fast, easy to use, free, and its multi-threaded to get the most out of my CPU cores, and the resulting H.264 MP4 files (YouTube doesn't like .mkv, so stick to the MP4 container with the H.264 codec) look amazing for their size, much better than the WMV9 files I'd been making in Vegas. The only thing it doesn't do right is scaling up or down, so I encode in Vegas to the final size and FPS I want as an uncompressed AVI file (it'll be huge, many Gigabytes), then use HandBrake to transcode it down to something I'm willing to share or upload.
