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In this paper, we consider rate adaptation for robust transmission of high-quality video over home networks, in particular IEEE 802.11 wireless LANs. Our approach includes on-line estimation of the time-varying bandwidth available at the application-/transport-layer. We propose a delay-constrained rate adaptation algorithm to select an optimal bit rate, subsequently enforced by a video transcoder. We examine the effectiveness of our novel delay-constrained rate adaptation algorithm, utilizing a simulation environment based on NS-2. Our simulation results show that transmission of MPEG-2 video over an IEEE 802.11b channel results in significantly better quality with rate adaptation compared to transmission without rate adaptation, and that delay-constrained rate adaptation performs significantly better than rate adaptation without a delay constraint.