A video processing system dynamically adjusts video processing prediction error reduction computations in accordance with the amount of motion represented in a set of image data and/or available memory resources to store compressed video data. In at least one embodiment, video processing system adjusts utilization of prediction error computational resources based on the size of a prediction error between a first set of image data, such as current set of image data being processed, and a reference set of image data relative to an amount of motion in a current set of image data. Additionally, in at least one embodiment, the video processing adjusts utilization of prediction error computation resources based upon a fullness level of a data buffer relative to the amount of motion in the current set of image data.