Perceptual image compression... Flickr recently rolled out this new JPEG encoder, and this article tells a bit of the behind-the-scenes work that went into it (note to the geekophobes: it's not very technical). They've automated something that I (and many others!) have done by hand: tweaked various “knobs” on JPEG encoders to get an image that was significantly compressed, but not degraded in perceived quality. It's that “perceived” bit that makes this hard, because the impacts of compression artifacts on visual perception are unobvious and subtle – as the Flickr team discovered!
One little factoid from the article that I particularly enjoyed: when people were shown identical images side-by-side, they only called them identical about two thirds of the time. Perception is tricky!