1. INTRODUCTION
In most current video coding standards, hybrid coding techniques with block-based motion compensation and transform coding are employed. Motion compensation is applied to exploit temporal redundancy from frame to frame while the spatial redundancy within a frame is exploited by transform coding. When the objects in the video scene undergo only displacement with no other transformation, motion compensation will provides excellent coding efficiency, which can be further improved when variable block sizes and multiple reference frames are used, as in H.264 [1]. However, in situations where the pure displacement assumption is violated, the coding efficiency gains provided by motion compensation can be significantly lower.