If I have a dv compressed source (ie from a camera) and recompress it again with a dv codec does the recompression reduce the quality of the output? In other words does DV compressed video suffer from generational loss like JPEG compressed images do?
In general: Yes, a dv codec does certainly suffer from render generations.
But especially the SonicFoundry dv-codec which is used in VegasVideo does not show any loss AT LEAST till the 10th render generation (this is what I tested) and it is said to be same till up to the 50th render generation. So - don't worry about a loss if you're working with filters and effects in VV.