Simplest h.264 to mpeg-2 converter
Since you want to use the command-line I would recommend ffmpeg.

Generally speaking, it's the most capable tool you'll find for converting/encoding  anything you could imagine. It's incredibly fast and utilizes the audio command-line encoding tool LAME (my favorite), which compliments it almost perfectly. To be quite honest, it has so many uses that I would never be able to explain them all; It's definitely a winner in my book, so check it out.

For parameters that all depends on you, your setup, and what your expectations are. Without knowing which encoder you plan on using, or have installed, there are just too many variables involved to specifically to tell you which arguments should be used. If you need help with that part of it once you compile/install it then I'm sure someone here can help you out.