1. A method for subtracting fixed pattern noise in a digital imaging system incorporating a digital image sensor, comprising: acquiring a reference noise image of a homogeneous, smooth surface; acquiring a frame of pixel data; selecting a prediction area within the frame of pixel data; for each pixel in the prediction area, calculating a predicted pixel value based on the pixel data of a neighborhood of pixels surrounding the pixel and using one or more pixel value prediction algorithms; for each pixel in the prediction area, calculating a predicted noise value using the predicted pixel value and the pixel data for the pixel; calculating a confidence estimate for each predicted pixel value based on the nature of the image at the neighborhood of pixels surrounding the pixel; calculating a prediction area noise estimate for each pixel in the prediction area using the predicted noise value and the confidence estimate, wherein the confidence estimate determines the amount of predicted noise value to be incorporated into the prediction area noise estimate for the pixel; temporally filtering the prediction area noise estimate for each pixel in the prediction area; calculating scaling parameters for a fixed pattern noise estimate of the frame of pixel data using the temporally filtered prediction area noise estimate and the reference noise image; calculating the fixed pattern noise estimate for the frame of pixel data using the scaling parameters and the reference noise image; and subtracting the fixed pattern noise estimate for each pixel from the frame of pixel data to generate a final image.