1. A computer system for encoding digital image data relating to a sequence of image frames to represent the sequence of image frames as digital data organized as a plurality of ordered layers, the layers including information to be used to reproduce and display the same or an associated sequence of image frames, the system including: A. a local motion estimator, for producing local motion estimates for pixel neighborhoods in sequential frames and producing from these estimates associated dense motion models, each of the pixel neighborhoods including a selected pixel and the pixels adjacent to the selected pixel; B. a motion segmentation processor, for determining, jointly, from the dense motion models i. regions of coherent motion over the entire sequence of frames, and ii. for each region of coherent motion a motion model representing the transformation of the region from frame to frame for the sequence of frames; C. a layer extraction processor, for forming for each of the regions of coherent motion a layer by associating with the region data that represents the associated image data, the layer including i. data representing pixel intensity information relating to the sequence of frames for each of the pixels included in the region, ii. data representing an ordering of the layer relative to other layers by depth in the image, the layer extraction processor determining the depth of a layer by determining if pixels in the layer are occluded in any of the frames in the sequence; iii. data representing motion information including parameters relating to the motion model associated with the region by the motion segmentation processor, and D. means for outputting the digital data comprising the layers to reproduce the same or an associated sequence of frames.