The relative velocity of A with respect to B is the vector \( \vec{V}_{AB} = \vec{V}_A - \vec{V}_B \). Since \( \vec{V}_A \) and \( \vec{V}_B \) are perpendicular, draw \( \vec{V}_A \) and \( -\vec{V}_B \) as two perpendicular sides of a right triangle; the resultant \( \vec{V}_{AB} \) is the hypotenuse. By the Pythagorean theorem, the magnitude of the hypotenuse is \( \sqrt{V_A^2 + V_B^2} \). Let's check each option against this vector-diagram result.
The right-triangle vector diagram confirms the magnitude of the relative velocity is \( \sqrt{V_A^2 + V_B^2} \).
Therefore, the correct answer is \( \sqrt{V_A^2 + V_B^2} \).