Why do you want to convert the format to a lesser quality? If it is because your DVD player supports VCD format and doesn't support SVCD format try the VCD header trick to see if that will work before conerting the format. Here is the thread with instructions on how to do the VCD header trick. http://forums.afterdawn.com/thread_view.cfm/40078
I need to make the file smaller though. I tried using TMPGEnc, but it says the file is "unsupported".
Go to the software section of this site and download the M2V plugin and that should allow the Mpeg2 file to load in TMPGEnc!
I got an error. It says "Read Error occurred at address 00402F40 of module 'TMPGEnc.exe' with 445C3A3F"