No, DV is either 4:1:1 (NTSC) or 4:2:0 (PAL), the numbers refer to the sampling of the YUV, bigger numbers = better. Now DVD mpeg-2 is 4:2:0 for both PAL and NTSC, although the way the 4:2:0 is done is slightly different to how it's done in PAL but that's more of an issue for the players.
Now when you apply FXs or create generated media Vegas does its calcs in 4:4:4 land and then converts the result back to whatever it has to output. Now if the output is mpeg-2 you are going from 4:4:4 to 4:2:0. Now there's NO magic here, you cannot turn 4:1:1 into 4:4:4 however if you've pushed things with say CC the 4:4:4 output MAY sit better going straight to the encoder rather than going back to 4:1:1 and then to 4:2:0.
Certainly if you look at your DVD with a component feed from the player to the monitor you'll see a small improvement on things like text. But this isn't a huge step up. I'm now working pretty much that way, there's nothing to be lost so why not shoot for the highest quality you can. Well there is one downside. If you render to DV first and then encode and have to make a change you might be able to do it on the rendered file rather than go back one step furthe which could save you a lot of time in rendering.
The other way is to render out using the 4:2:2 YUV codec, just be warned, bigger files. Quality then is close to uncompressed but file size is smaller. 4:2:2 is broadcast quality.

Bob.