1. A method for reducing noise in a color image captured by a digital image sensor comprising a two dimensional array of light-sensitive pixels including color pixels for at least three distinct color channels, the pixels being arranged in a rectangular minimal repeating unit, comprising using a processor to perform the steps of a) for each pixel of a first color channel determining noise reduced-pixel values using a first noise reducing process including: i) computing a first set of local edge-responsive weighting values for a plurality of directions around a central pixel of the first color channel; ii) computing pixel differences between the pixel value of the central pixel and pixel values for nearby pixels of the first color channel in the plurality of directions; iii) computing weighted pixel differences by combining the pixel differences with the corresponding first set of local edge-responsive weighting values; and iv) computing a first noise-reduced pixel value for the central pixel by combining the weighted pixel differences with the pixel value for the central pixel; and b) further noise-reducing the first noise-reduced pixel values for each pixel of the first color channel using a second noise reducing process including: i) computing a second set of local edge-responsive weighting values for a plurality of directions around a central pixel of the first color channel; ii) computing chroma values representing differences between pixel values of the first color channel and pixels values of at least a second different color channel for a minimal repeating unit containing the central pixel and for a plurality of nearby minimal repeating units in the plurality of directions; iii) computing chroma differences between the chroma value corresponding to the central pixel and the chroma values for the nearby minimal repeating units in the plurality of directions; iv) computing weighted chroma differences by combining the chroma differences with the corresponding second set of local edge-responsive weighting values; and v) computing a second noise-reduced pixel value for the central pixel by combining the weighted chroma differences with the first noise-reduced pixel value.