vegas has no input monitoring. Many users there feel no need for it to enter the professional world. Im not among them

I've been arguing for it till I am blue in the face. It should have been in vegas 3 but you can probably than douglas spotted eagle as a big voice against it. That and ASIO, and VST, and Midi control of the faders.
There are many recent and ancient threads about input monitoring in vegas, one right now about WDM on their forums goes into it in depth.
It is up to your hardware as to whether it will do any software controlled hardware monitoring, but under no circumstances can vegas do traditional, tape style, autoinput monitoring
If your soundcard is among those that can do software controlled hardware switching, there are some clunky but somewhat effective workarounds.
Just so we're clear a professional tape recorder's autoinput function works like this:
when a track is armed:
during STOP-monitors input
during PLAY-monitors tape
during RECORD-monitors input
on a punch in, monitors tape until the punch in point when it switches to monitor input until the punch out point where it switches to monitor tape again
in vegas, first of all in order to maintain the same track/channel order on a console youve got to assign the tracks to STEREO busses. In order to route track one to channel 1 you MUST pan track 1 HARD LEFT in vegas and drop it by 6dB. That means any dx SEND fx you are using on channel 1 now ONLY go the left side, reverb is now worthless if you want to preserve the correct stereo image. Also, any buss fx you have now are applied to both channel 1 AND 2 like it or not. In the case of a dynamic fx, you are now sidechaining two possibly unrelated channels, like it or not. This needs to be fixed.
In vegas, if your card can handle hardware switching AND you are routing tracks to busses to preserve the track channel relationship, it works like this:
When a track is armed ( oops remember you cant change any channel settings like volume and pan while a track is armed, KILLING the ' flow " of a session )
During STOP-monitors input
During RECORD-monitors input
During PLAY-monitors tape(disc)
on a punch monitors tape even during the punch in area, so sorry youre screwed ( but there ARE workarounds, though they are hassles and "flow" blockers)
This MAY be fixed in vegas 4 as they are finally coming to their senses and adding asio instead of keeping their loyal customers in the stone age for whatever crazy reason theyve been doing it so far.
BTW Im a hardcore die hard loyal vegas user and it is my favorite app, clunks and all