Can I convert froma 401K to a Roth without penalties, and if so how??

I assume that this plan is sponsored by a sole proprietor or a business owner, and that this person wants to move his money out of the 401(k) into an IRA, which would then be converted to a Roth IRA.

The only way he can get paid from the 401(k) plan is if he terminates it - a sole proprietor can't have a separation from service, and if the plan is sponsored by the business owner presumably the business is not firing him. Lot of assumptions.

In order to get a payment from a terminated 401(k) plan, the participant who continues to work can't be covered by a successor defined contribution plan (other than ESOP) for 12 months. So the price of terminating the 401(k) plan for this person is that he can't get contributions under a defined contribution plan for 12 months.

If he can be paid under the above scenario, he can rollover to a conventional IRA and then convert to a Roth IRA.