1. A computer-implemented method for transforming a block of pixels within a frame of a digitized video image using a selectable one of a set of transform functions, each transform function having an inverse transform function, and each block having a predetermined set of image characteristics, the method comprising: establishing adjustable selection criteria for selecting a transform function; detecting respective characteristic values for the image characteristics of a block; selecting a first transform function from the set of transform functions based on said characteristic values and said selection criteria; applying said first transform function to the block to form a transformed block; quantizing said transformed block to form a quantized block; selecting an inverse transform function whose application minimally covers said quantized block; inversely quantizing said quantized block to form an inversely quantized block; applying said inverse transform function to said inversely quantized block to form a decoded block; establishing a quality value for said decoded block; and updating said selection criteria based on said quality value and said characteristic values, wherein the establishing, detecting, selecting, applying, quantizing, and updating operations are performed by a processor.