1. A method for compressing an input image comprising the system-implemented steps of: the system generating a binary image having edge information and representing an estimate of the bi-level information in the input image; the system filtering the binary image to produce a processed binary image; the system subtracting the processed binary image from the input image on a pixel-by-pixel basis to produce a difference image; the system reducing components in the difference image created by mismatching between binary edges in the processed binary image and the input image to produce a resulting image, wherein the step of the system reducing components comprises removing portions of edges produced in the difference image created by fractional pixel misalignment between binary edges in the input image and the processed binary image; the system compressing the binary image and the resulting image to create a compressed data stream, wherein the step of compressing comprises the system-implemented steps of compressing the binary image into compressed binary data; and compressing the resulting image into compressed continuous-tone data, such that the input image is compressed into compressed binary data and compressed continuous-tone data.