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This paper presents a flexible and scalable motion estimation processor capable of supporting the processing requirements for high-definition (HD) video using the H.264 Advanced Video Codec, which is suited for FPGA implementation. Unlike most previous work, our core is optimized to execute all existing fast block matching algorithms, which we show to match or exceed the inter-frame prediction performance of traditional full-search approaches at the HD resolutions commonly in use today. Using our development tools, such algorithms can be described using a C-style syntax which is compiled into our custom instruction set. We show that different HD sequences exhibit different characteristics which necessitate a flexible and configurable solution when targeting embedded applications. This is supported in our core and toolset by allowing designers to modify the number of functional units to be instantiated. All processor instances remain binary compatible so recompilation of the motion estimation algorithm is not required. Due to this optimization process, it is possible to match the processing requirements of the selected motion estimation algorithm to the hardware microarchitecture leading to a very efficient implementation.