1. A method for compressing a digital image having both saturated text and/or line art and pictorial imagery, the method comprising the steps of: (a) receiving the digital image as blocks of pixels; (b) analyzing the block content to determine if all or any combination of the saturated text and/or line art, pictorial imagery or other types of image data are present; (c) assigning the saturated text and/or line art, the pictorial imagery, the other types of image data to one of a plurality of categories; (d) compressing the block of saturated text and/or line art, if any, according to a first predetermined compression method; (e) compressing the pictorial imagery, if any, according to a second predetermined compression method; (f) compressing the other types of imagery, if any, according to other predetermined compression methods; and (g) providing means of conveying the image categories to a decoder.