Vector quantization (VQ), a well-established image compression technique, is attractive due to its mathematically simple compression formulation and efficient decompression implementation. Unfortunately, VQ typically suffers from high cost of codebook computation, as well as relatively high codebook search overhead during compression. Such costs can be prohibitive when VQ is employed in real-time surveillance applications, especially with large-format images and moderate to high compression ratios.In response to this situation, Frontier Technology, Inc. has developed an efficient codebook search technique called Tabular Nearest Neighbor Encoding (ThE). This approach significantly reduces the codebook search cost for VQ-and VQ-like compression algorithms, and can increase pattern-matching accuracy and efficiency in template-based automated target recognition (ATR) applications. In particular, TNE's VQ-like codebook can represent a database of target patterns for ATR purposes, which tends to yield an increase in pattern matching efficiency due to the processing of fewer (encoded) data.In this series of two papers [37], a high-level overview of the TNE algorithm is presented. The performance of TNE is analyzed using training images having different size, statistical properties, and noise level than the source image. ThE is compared with several published algorithms such as visual pattern image coding (VPIC), JPEG, and EBLAST. The latter is a relatively new, high-compression image transform that has compression ratio CR 200:1 that can be consistently achieved with low MSE. Analysis focuses on the ability of ThE to provide low to moderate compression ratios at high computational efficiency on small-to large-format text and surveillance images.