The MPEG-2 video compression standard is successfully adapted in the DVD and digital TV broadcast industries. The new MPEG-4 standard has much broader and ambitious perspective to support high and low bit-rate multimedia applications on existing and future networks. MPEG-4 aims to complement MPEG-2, not override it. Therefore, one can envisage that MPEG-2 and MPEG-4 will co-operate and coexist in a synergistic manner for a wide variety of application environments. This paper addresses the problem of transcoding MPEG-2 video content to MPEG-4 compliant video bitstream. The goal is to develop effective architectures and algorithms for efficient transcoding. We discuss two transcoding approaches: the pixel domain method and compression domain method. We discuss their details to facilitate their applications in different situations. We report simulations authenticate the performance of the proposed transcoding solutions.