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In this paper, we present error-resilient Internet video transmission using path diversity and rate-distortion optimized reference picture selection. Under this scheme, the optimal packet dependency is determined adapting to channel characteristics and video content, to achieve a better trade-off between coding efficiency and forming independent streams to increase error resilience. Packets are sent over the selected path that minimizes the distortion, while taking advantage of path diversity. Experiments demonstrate that the proposed scheme provides significant gains over video redundancy coding and the NACK mode of conventional reference picture selection.