1. A method of compressing an array of data entries in the form of digital electrical signals, the array representing a two-dimensional image, the method comprising the steps of: (a) forming an image data pyramid from the array of data entries, said pyramid having a plurality of layers, a first and lowermost said layer comprising said array of data entries, and each subsequent higher layer comprising a data array representing the image using less data, and having smaller dimensions, than the previous layer; (b) processing each layer of the image data pyramid so as to obtain: a set of compressed encodings for each layer, wherein each said compressed encoding can be uncompressed to provide an approximation of a block of image data derived from a respective layer of the image data pyramid; and a respective quality gain factor associated with each said compressed encoding; (c) creating an ordered list of the compressed encodings, ordered sequentially according to the quality gain factors associated therewith; (d) selecting the compressed encoding associated with the largest quality gain factor and adding this compressed encoding to a compressed representation of the data array; (e) selecting the compressed encoding associated with the next largest quality gain factor and adding this compressed encoding to the compressed representation of the original image data array; and (f) recursively repeating step (e) for the remaining compressed encodings until the number of bits in the compressed representation reaches a predetermined maximum.