1. A method for video coding a sequence of digitized images using a video encoder apparatus having one or more processors operable to execute computer-executable instructions, said method comprising: (a) predicting, with the one or more processors, contents of each image utilizing a rate distortion optimization criterion that is dependent on a Lagrange multiplier, thereby determining a prediction error; (b) transforming, with the one or more processors, the prediction error resulting from predicting step (a) into a plurality of transformed residual coefficients in each image; (c) quantizing, with the one or more processors, the transformed residual coefficients in each image; (d) determining, with the one or more processors, the Lagrange multiplier for each image based on a probability distribution of the transformed residual coefficients of the respective image, the probability distribution having its maximum probability at its mean zero and being formed such that the probabilities decrease to zero from the mean to large absolute values of the transformed residual coefficients, wherein a variance of the probability distribution is calculated from the plurality of transformed residual coefficients in the respective image; and (e) video coding, with the one or more processors, a sequence of digitized images based on the determined Lagrange multiplier for each image.