1. A method of decoding data representing an original image, the method comprising: using a computer to performs the following steps of: receiving lossy compressed data; receiving quadtree (PQR) data that define blocks of pixels, said blocks of pixels having various sizes and said blocks of pixels having been generated by adaptively block sizing the original image; separating the lossy compressed data into DC data and AC data; decoding, separately, the DC data to determine DC coefficients and the AC data to determine AC coefficients, wherein the PQR data are used to determine the AC coefficients; inverse quantizing the AC coefficients; inverse transforming the DC coefficients and the inverse quantized AC coefficients to produce lossy decompressed data that can be used to reproduce an image similar to the original image; receiving unquantized residual compressed data, wherein the unquantized residual compressed data is unquantized regardless of a size of the residual data prior to compression; decoding the unquantized residual compressed data to produce residual decompressed data; and combining the lossy decompressed data with the residual decompressed data to produce lossless data that exists in the exact manner in which the data representing the original image existed before being encoded, wherein an image reproduced using the lossless data is substantially the same as the original image.