One of the quickest ways is to use your camera or VCR to downconvert to SD. Just set it to downconvert and use Vidcap to capture as SD DV. Edit and encode the captured video as per normal.
That's not the very best way to work but it'll get you started with the least amount of grief.

Bob.

The single most important thing if you are downrezzing 1080i hdv to 60i SD is that you have a deinterlace method selected. It doesn't matter whether you choose interpolate or blend fields because Vegas isn't actually going to deinterlace.

The reason that this is important is that for some strange reason, Vegas downrezzes differently depending on how you set the "select deinterlace method" tab. When it is selected, Vegas will separate the odd/even fields., resize them separately, then fold them back together into an interlaced SD image. Without the "select deinterlace method" tab selected, Vegas will resize each frame as a single progressive image. This resizes the interlace comb which looks absolutely horrible on any motion, especially sideways motion.

The second most important thing is that you render straight to DVD compliant mpeg2 and not render to a DV codec master first. This will preserve the color-space of your original HDV footage.

One other thing I like to do is render to 704x480 instead of 720x480. The reason is that 704x480 is a better aspect ratio match and avoids the very slight pillar-box black bars on either side of the frame. These are outside of what a widescreen TV will show anyway but you'll see it when you watch it on a computer.

My experience is that Vegas does a better downrez than most NLEs.