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This lecture covers the key ingredients of the JPEG compression algorithm, including block-level compression, transform, smart quantization, and entropy coding. It explains the process of splitting images into 8x8 blocks, computing the DCT of each block, and using psychovisually-tuned quantization tables. The advantages of nonuniform bit allocation and examples of runlength encoding are also discussed. The lecture delves into variable-length encoding, prefix-free codes, and entropy coding using the Huffman algorithm.