easiest way to convert .mov to .m2v or mpeg2

MOV is just a container which can contain any number of different codecs. Can you open these files with Quicktime Player? If so, press Command I to Get Info, and post the specific information for the format of these files.

Open in MPEG Streamclip (free).
Export to DV, have a lot of room available.
Use the DV file.
Exporting to QT Animation codec works, too though the files are even bigger than DV. But IIRC it is faster.

Or use AIC codec (AppleIntermediateCodec.component) these files are small with very in good quality.
I use this codec when not wanting to convert to h.264.

FCP doesn't support the editing of h.264 natively. H.264 is not an editing codec, it's a delivery codec. Assuming you intend on viewing this DVD on a standard player, you should convert your source material into a native codec and resolution, such as DV/DVCPRO NTSC 720x480 before importing into FCP. That will streamline your workflow into DVD Studio Pro, and keep all resulting footage in a format that DVDSP will accept.

i'm trying to use my .mov files (quicktime) in my dvdsp project. of course i get the "incompatible format". so, what is the easiest way to convert?... i have them (6 different videos .mov) opened in fcp and i am editing them together. maybe i can export to a format that will work
Use the "Export using Compressor" File menu option and select one of the appropriate DVD preset options. As to "native" editing in FCP, files that are not edit compatible "natively" with project settings can be rendered manually during the editing process from within FCP or are rendered automatically as part of the export process as needed. If no editing is required, simply open Compressor as an independent application, add your 6 files to the batch list, set appropriate DVD compression options, and wait for the files to be compressed to (I assume you want) M2V/AC3 files which can then be imported to DVDSP for playback as individual files or as a continuous title set.

As to "native" editing in FCP, files that are not edit compatible "natively" with project settings can be rendered manually during the editing process from within FCP or are rendered automatically as part of the export process as needed.

This indeed is true, but depending on the editing needs, it is recommended to formulate a native workflow in order to reduce the amount of time spent on rendering. Why spend time rendering after every edit within FCP with a non-native format when you can eliminate that problem by transcoding into a native format prior to the editing process?

But if no editing is needed, then I'll second Jon's suggestion by taking those clips directly to Compressor.

any ideas?
What version of FCP/Compressor/DVDSP are you using? I lost most of my compatibility when I installed OS X.5 and ended up having to to update to the old FCP/DVDSP individual packages to the new Final Cut Studio 2 package.

final cut studio 2...running on 10.5.5... compressor suggested a restart or verify installation is correct.
I would probably try two things next. I would probably first try the conversion of a single clip and see if I get the same message. If I do, I would likely take the message advice and try to re-install the application to "verify" a correct install.