If video quality is important to you, then simply buy more hard -drives, They're cheap. You can get an 80-gig hard drive for $70.00. If you consider that MPEG-2 is compression, you'll be starting with video which already has a quality degradation compared to DV. Not many software packages handle MPEG-2 editing gracefully because of the need to decode and then re-encode the edited video back to the compressed domain every time you make an edit. When you render the edited output as MPEG-2, you'll be creating in effect '2nd generation' re-compressed video. The quality loss could be unacceptable. If this is your only option, I recommend that you try a little clip first, to see if this is really a viable solution, compared to increasing your storage space.