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Multimedia applications involving the transmission of video over communication networks are rapidly increasing in popularity. Such applications can greatly benefit from adapting video coding parameters to network conditions as well as adapting network parameters to better support the application requirements. These two dimensions can both be viewed as allocating source and network resources to improve video quality. We highlight recent advances in optimal resource allocation for real-time video communications over unreliable and resource constrained communication channels. More specifically, we focus on point-to-point coding and delivery schemes in which the sequences are encoded on the fly. We present a high-level framework for resource-distortion optimization. The framework can be used for jointly considering factors across network layers, including source coding, channel resource allocation, and error concealment. For example, resources can take the form of transmission energy in a wireless channel, and transmission cost in a DiffServ-based Internet channel. This framework can be used to optimally trade off resource consumption with end-to-end video quality in packet-based video transmission. After giving an overview of this framework, we review recent work in two areas-energy efficient wireless video transmission and resource allocation for Internet-based applications.