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There is no such thing as lossless recoding. Any time a video is recoded, there are digital losses. Depending on the bitrate involved, the loss can be so subtle that the viewer cannot see it. But, each and every re-encoding results in added digital artifacts. Initially, the broadcast industry was kinda worried about the re-encoding that goes on from the production stage up thru the broadcast stage. But, that point is kinds moot now that the video that is broadcast (OTA/cable/DBS) is so bit starved that it can look horrible.
You also cannot have something re-encoded and have it "look better" than the original. It is impossible to create something from nothing. It it like those TV shows where a still image, or surveillance video, is "enhanced" to get a sharp clear image. A crappy pixel image is going to stay a crappy pixel image.
When you re-encode from 59.94 fps to 29.97 fps, one of two things has to happen: 1) every other frame is dropped, or 2) two consecutive frames are blended together to create a single frame. You didn't say why you want to go to 29.07 fps, instead of keeping the original 59.94 fps video.
The general rule of thumb is that when you re-encode, in order to reduce the added artifacts, is to have at least a 2:1 bitrate difference. That means if the resulting bitrate is 10 Mbps, the source bitrate needs to be 20 Mbps, or more. Keep in mind that 20 Mbps MPEG-2 video is approximately equal to H.264 video at 40 Mbps. So, recoding 10 Mbps MPEG-2 video to 10 Mbps MPEG-2 video does nothing but add digital artifacts. It will not result in a better looking video. Recoding from 10 Mbps MPEG-2 video to 10 Mbps H.264 video will result in fewer digital artifacts due to the 2:1 ratio and the better H.264 encoder. But, in all cases, the resultant recoded video will not look better than the original.
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