Rendered clip in mpeg-2, if I put it back into vegas 4 again

Yes, it will lose quality. Mpeg-2 is a destructive codec, and the more you use it, the worse your footage will look. You only want to render to Mpeg-2 as your final step, after all other editing is done.
 
Is this footage you pulled from a DVD or from your camera? If from your camera, stay in AVI until you’re done – if you do renders you want to bring back in to edit, render them as AVI. Don’t do MPEG-2 until you’re ready to make a DVD.
 
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