A distributed real-time video playback application is presented using an isochronous Ethernet to interconnect video clients to dedicated video servers. Special displaying functions such as seeking, pausing, stepping, and regular/fast playing forward and backward are supported, which are all emulated in the server through control messages received from the clients. The video compression scheme is DCT-based and entropy-coded with adaptivity to the local statistical properties. The important property ofthe coding system is the constant quality of the decoded frames and is reached by minimizing the average bitrate subject to a constraint on an estimate of the quantization error. This coding scheme also gives rise to a higher PSNR performance as compared with JPEG.