1. A method of encoding a video in a video encoder, the video including a plurality of frames including a target frame, the target frame including an inter-coded partition, the method comprising: encoding and decoding one of the plurality of frames other than the target frame to produce a reconstructed reference frame; selecting a predicted motion vector for the inter-coded partition; calculating predicted residual values from the difference between the inter-coded partition and a reference block in said one of the plurality of frames, wherein the reference block is identified by the predicted motion vector; and determining an actual motion vector with reference to the reconstructed reference frame using a rate-distortion expression incorporating the predicted residual values wherein said selecting the predicted motion vector includes selecting a candidate motion vector that minimizes a rate-distortion cost equation with respect to said one of the plurality of frames within a first search area, wherein the rate-distortion cost equation is: J pre ⁢ ⁢ _ ⁢ ⁢ me ⁢ ⁢ _ ⁢ ⁢ min = min v i ⁢  x i - p i ′ ⁡ ( m i , v i , x i - 1 )  + λ ⁢ ⁢ r v and wherien v i is the candidate motion vector, x i is the target frame, x i-1 is said one of the plurality of frames, m i is the coding mode, r v is the coding rate for the motion vector v i , λ is the Lagrangian multiplier, and p′ i is the reference block in said one of the plurality of frames x i-1 identified by the motion vector v i .