Do you mean .mpg (mpeg-1), .vob/m2v (mpeg-2) or mp4 (mpeg-4)? You can do all of them using Quicktime Pro but you have to get a license for all the features:
You can also use MPEG Streamclip:
The latter is particularly good at editing mpeg-1/2 and can even edit them non-destructively but the export is a bit odd.
In each, you'd export to some kind of ProRes - proxy is a bit low quality so you'd aim for LT or standard. Some mpegs are interlaced too so you should deinterlace when you export - Quicktime doesn't do this very well but Streamclip is fine.