1. A method for decoding compressed image data using block transformed images wherein block boundaries are adaptively processed to reduce block artifacts in it reconstructed image, comprising the steps of: decoding the compressed image data to create transform coefficients; applying an inverse transform to the transform coefficients obtained from the compressed image data; frequency analyzing the transform coefficients to determine a frequency content of the transformed image along boundaries between blocks; adjusting a strength of a low pass blur filter in response to the analyzed frequency content of the transformed image along the block boundaries; and processing the transform coefficients with said filter to reduce block artifacts along the boundaries between blocks.