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We propose a mixed resolution framework based on full resolution key frames and spatial-reduction-based Wyner-Ziv coding of intermediate nonreference frames. Improved rate-distortion performance is achieved by enabling better side-information generation at the decoder side and better rate-allocation at the encoder side. The framework enables reduced encoding complexity by low resolution encoding of the nonreference frames, followed by Wyner-Ziv coding of the Laplacian residue. The quantized transform coefficients of the residual frame are mapped to cosets without the use of a feedback channel. A study to select optimal coding parameters in the creation of the memoryless cosets is made. Furthermore, a correlation estimation mechanism that guides the parameter choice process is proposed. The decoder first decodes the low resolution base layer and then generates a super-resolved side-information frame at full resolution using past and future key frames. Coset decoding is carried using side-information to obtain a higher quality version of the decoded frame. Implementation results are presented for the H.264/AVC codec.