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One of the central problems in wireless video transmission is the choice of source and channel coding rates to allocate the available transmission rate optimally. In this paper, we present a structural distortion model for video streaming over time-varying fading channels. Based on the model, we study the end-to-end distortion for various bit-rate allocation strategies and channel conditions. We show that the robustness to channel variations is crucial for the streaming performance when frequent bit-rate adaptations are not feasible. It is achieved at the expense of higher source distortion in the encoder. Our findings are illustrated on a practical problem of distortion-optimal selection of transport formats in an adaptive modulation and coding (AMC) scheme used in HSDPA.