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With the increasing use of multimedia technologies, image compression requires higher performance as well as new features. To address this need in the specific area of still image encoding, a new standard is currently being developed, the JPEC2000. It is not only intended to provide rate-distortion and subjective image quality performance superior to existing standards, but also to provide features and functionalities that current standards can either not address efficiently or in many cases cannot address at all. Lossless and lossy compression, embedded lossy to lossless coding, progressive transmission by pixel accuracy and by resolution, robustness to the presence of bit-errors and region-of-interest coding, are some representative features. It is interesting to note that JPEG2000 is being designed to address the requirements of a diversity of applications, e.g. Internet, color facsimile, printing, scanning, digital photography, remote sensing, mobile applications, medical imagery, digital library and E-commerce.