Abstract: An interlaced image processing module and corresponding method facilitate improved processing of interlaced motion images. In one embodiment, the interlaced image processing module receives image data frames having interlaced first and second fields and produces a reference field and error field. The reference field corresponds to the still image content of the interlaced frame, whereas the error field corresponds to the motion content of the interlaced frame, particularly the motion between fields. Motion between fields is thus represented in the error field, without redundant representation of the still image content provided by the first field. Where there is little motion between fields, the error terms will be small so the predictor preserves the coding efficiency provided by any auto-correlation in the image.