I. Introduction
H.264, the newest hybrid video compression standard [6], has proved its superiority in coding efficiency over its precedents, e.g., it shows a more than 50% rate reduction over the popular MPEG-2. As the enormous volume of video data is constantly fueling the demand for better and better compression [7], it is desirable to study how rate distortion (RD) methods based on fundamental theoretical research in RD theory can be used to further enhance the compression performance in the H.264 compliant coding environment.