This Small Business Innovation Research (SBIR) Phase II project aims to develop novel algorithms and hardware accelerators, as well as a prototype, for a real-time, high-resolution, H.264-based network video appliance. H.264 is the latest video compression standard, jointly developed by the ITU-T and ISO/IEC (MPEG). It is also designed for transmission over packet-based networks and to achieve significantly superior compression efficiency compared to previous standards and proprietary solutions. This compression efficiency, however, is achieved at the cost of severely increasing the complexity of the encoder. Real-time, high-resolution H.264 encoders are not feasible with current personal computers or DSP-based approaches. The new algorithms and designs for hardware acceleration will be targeted at video compression techniques that were introduced by the H.264 standard for the first time. They are anticipated to improve encoder performance by at least one order of magnitude compared to current implementations If successful a real-time, network appliance with the compression efficiency of H.264 will have broad applications, particularly in the areas of distance learning, remote training, security and surveillance. The innovations resulting from this should enable implementers to significantly improve the real-time performance of H.264. Limited bandwidth and the resulting poor quality video have so far been an impediment to realizing the full benefits of digital video. A real-time, high-resolution network appliance with the compression efficiency of H.264 will bring digital video in the mainstream by delivering high quality video to the endpoints of the network. This will drive both business and consumer uses. It will provide the visual communication crucial to making distance learning and remote training a superior experience and compelling from an economic viewpoint - and therefore mitigate geography as a barrier to participation in scientific and engineering activities. Students can partake in classes offered at remote campuses while rural K-12 schools can partner with museums in major cities to provide their students with a richer education