The compression of successive blocks of digital data is optimized by selecting between different compression algorithms or different data formats on a block-by-block basis. In one application, digitized interlaced video signals are processed for transmission in a compressed form. A set of pixel data presented in a field format is compressed to provide a first compressed video signal. The set of pixel data is also presented in a frame format and compressed to provide a second compressed video signal. Errors are evaluated in the first and second compressed video signals. The compressed video signal having the least error is selected for further processing. The technique is repeated for successive sets of pixel data and the selected signals are encoded to identify them as field formatted or frame formatted signals. The encoded selected signals are then combined to provide a compressed video signal data stream for transmission. Apparatus for receiving and decoding the signals is also disclosed.