1. A method for use in encoding and decoding a data set representing an image, comprising: a first subroutine for partitioning the data set into first and second sets, for adding the first set into a list of insignificant sets (LIS), and for initializing a list of significant pixels (LSP); a second subroutine for testing the first and second sets for significance with respect to a threshold value, partitioning significant members of the first and second sets in accordance with first and second partitioning functions, respectively, and adding significant pixels to the LSP; a third subroutine for refining the quantization of the pixels in the LSP; and a fourth subroutine for decrementing the threshold value, wherein the second, third and fourth subroutines are repeated until encoding/decoding of the data set has been completed.