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This paper proposes a channel error adaptive FEC algorithm to balance the conflict between the QoS of video transmission and the bandwidth utilization ratio in wireless IP networks. Two analytic models are derived, one is playable frame rate in MPEG video stream, another is effective utilization ratio of FEC. Based on these analytic models, quality of video stream and effective utilization ratio of FEC under different network conditions (presented by packet loss probability in this paper) are predicted. Then optimal amount of redundant packets is calculated and decided, which makes both the quality of video stream and the effective utilization ratio of FEC approximate their maximum. The simulation results show that the proposed algorithm improves system performance in both the QoS of wireless video transmission and the utilization of bandwidth.