Broadcast television and home entertainment have been revolutionised by the advent of digital TV and DVD-video. These applications and many more were made possible by the standardisation of video compression technology. The next standard in the MPEG series, MPEG4, is enabling a new generation of internet-based video applications whilst the ITU-T H.263 standard for video compression is now widely used in videoconferencing systems. MPEG4 (Visual) and H.263 are standards that are based on video compression (“video coding”) technology from circa. 1995. The groups responsible for these standards, the Motion Picture Experts Group and the Video Coding Experts Group (MPEG and VCEG) are in the final stages of developing a new standard that promises to significantly outperform MPEG4 and H.263, providing better compression of video images together with a range of features supporting high-quality, low-bitrate streaming video. The history of the new standard, “Advanced Video Coding” (AVC), goes back at least 7 years. After finalising the original H.263 standard for videotelephony in 1995, the ITU-T Video Coding Experts Group (VCEG) started work on two further development areas: a “short-term” effort to add extra features to H.263 (resulting in Version 2 of the standard) and a “long-term” effort to develop a new standard for low bitrate visual communications. The long-term effort led to the draft “H.26L” standard, offering significantly better video compression efficiency than previous ITU-T standards. In 2001, the ISO Motion Picture Experts Group (MPEG) recognised the potential benefits of H.26L and the Joint Video Team (JVT) was formed, including experts from MPEG and VCEG. JVT’s main task is to develop the draft H.26L “model” into a full International Standard. In fact, the outcome will be two identical) standards: ISO MPEG4 Part 10 of MPEG4 and ITU-T H.264. The “official” title of the new standard is Advanced Video Coding (AVC); however, it is widely known by its old working title, H.26L and by its ITU document number, H.264 [1].