Abstract-Due to random delay variations in current best effort networks, packet video applications rely on end-system buffering and playout adaptation to reduce the effects of disruptions on the required smooth stream presentation. To study the effect of buffering and playout adaptation, we present an analytical model based on the M/G/1 queueing system with finite buffer capacity and traffic intensity equal to or greater than unity. This model fits well a range of new applications that have limited buffer resources for the reception of incoming frames. We introduce the Variance of Distortion of Playout (VDoP), a new metric that accounts for the overall presentation disruption caused by buffer underflows, intentionally introduced gaps during slowdown periods and data loss from overflows. VDoP is an elegant and fair metric for the estimation of playout quality and will hopefully assist the development of better adaptation algorithms. Furthermore, the effect of finite buffer capacity is examined in relation to stream continuity, revealing a system behavior not previously accounted for. The sensitivity of the system to the variance of the arrival process is also examined by means of simulation. Finally, an online algorithm is presented for the exploitation of our study on implemented systems.Keywords-Adaptive video playout, video continuity, finite M/G/1, Markov Modulated Poisson Process