I have an mpeg 4 file that needs to be coverted to an mpeg 2 file. Can I simply import into Vegas and re-export as an mpeg 2 without losing quality? Im using Vegas HD. I wont have access to my system for a day or so whcih is why I have not tried it yet. Is there a better way to covert the file without taking a hit in quality?

You always lose quality converting from one file format to another.
The amount of loss depends on the quality of the source material and the format and bitrate of the file you're rendering it to.
MPEG-2 is well known for reducing quality as it throws out a lot of the original chroma information.
The best you can do with MPEG-2 (is this is for a DVD?) is a custom CBR (constant bit rate) of 8,000,000.
This assumes that the file is under 70 min. long.
Anything longer and you have to start reducing the bitrate to get it to fit.

The file is not for DVD. Its actually for a commercial that will air on a cable station. In the past they took the mpeg4 format but now they are only accepting mpeg2. I dont have immediate access to the orignal project or I would simply do a new export. The source mpeg4 is an hd file 720x1280. Ive read post about a program called "Hand Break" is this a vaild option?

You could just pull the mp4 file into Vegas and render out a really high bitrate mpeg2 file. Try 35Mbps so it's basically like spitting out a Bluray mpeg2 file. You will lose some quality because the MP4 file is already highly compressed but it might be acceptable. If the station will accept a 720x1280 file I'd keep the same dimensions so you don't have to worry about any resizing problems.

I agree with Garrett but I'd check with the station to see if they have any special specs that you need to stick to.
I've done a lot of stuff for my local cable company and I had to do some experimenting before I found the file specs that would meet the needs of their playback server.

...Ive read post about a program called "Hand Break" is this a vaild option?
No, Handbrake does not encode to MPEG2.

Garrett & Mike's advice looks good...

Update: I imported the mpeg 4 into vegas and then exported as an mpeg2. The file looks great and there is no real visible loss. I should also note that the original mpeg4 was created from Vegas so perhaps that helped, along with the fact the all the source footage was HD. Thanks for the input everyone.