Re-Rendering .m2v ?
 

I just dropped a VOB file into the timeline because I need to edit it in order to put this footage on another DVD. How bad will the footage look after it's encoded a second time to mpeg2? Are there any tips or anything I can do to preserve as much quality as possible for the re-render?

I would suggest selecting a very small portion of it and do a quick render (maybe like 10 seconds of video) to see what your final result will look like. I would suggest playing with some effects and color correction, because it will look pretty different when converting it from HDV > DV because of the colorspace. You don't have to necessarily render the whole project, just some test renders to see what your final output will look like.

What is HDV?
I did the encode yesterday and it looks just fine to me, I don't even see any loss of quality or color change so I'm not too worried about it anymore..