1. A method for determining one or more sub-block sizes for a macroblock in a transcoding process for an incoming bitstream, the method comprising: determining a macroblock in the incoming bitstream; dividing the macroblock into a plurality of segmented blocks, each segmented block being characterized by a first size including a plurality of pixels; determining for each of the plurality of segmented blocks, a statistical measure comprising a sum of absolute difference (SAD), computed for each of the plurality of segmented blocks using a motion vector for the macroblock; comparing the statistical measures for a first one and a second one of the plurality of segmented blocks within the macroblock; and if the difference between the statistical measures for the first one and the second one of the plurality of segmented blocks is lower than a predetermined threshold, combining the first and second segmented blocks, and selecting the size of the combination as a sub-block size for the transcoding process for the first and second segmented blocks; but if the difference between the statistical measures for the first one and the second one of the plurality is not lower than the predetermined threshold, comparing the statistical measures for the first one and a third one of the plurality of segmented blocks within the macroblock; and if the difference between the statistical measures for the first one and the third one of the plurality of segmented blocks is lower than the predetermined threshold, combining the first and third segmented blocks, and selecting the size of the combination as a sub-block size for the transcoding process for the first and third segmented blocks; but if the difference between the statistical measures for the first one and the third one of the plurality is not lower than the predetermined threshold, selecting the first size as a sub-block size for the transcoding process for the first segmented block.