A video transcoder for converting a compressed input video bit-stream having one spatial resolution into a compressed output video bit-stream having a different spatial resolution in a manner that enables the transcoder to dynamically change the amount of computational resources allocated to the conversion process. In one embodiment, the video transcoder has a plurality of configurable processing paths whose configuration determines the amount of allocated computational resources. Exemplary processing-path configuration changes may include, but are not limited to engaging or disengaging a processing path, redirecting a data flow from flowing through one processing path to flowing through another processing path, and attaching or detaching one or more processing modules to an engaged processing path. The capability to make these and other configuration changes enables the video transcoder to adjust the computational complexity and picture quality on the fly, without interrupting the video sequence in the output video bit-stream.