A method of encoding digital video, the method comprising: obtaining video information associated with a base layer and a corresponding enhancement layer; determining a first weight associated with a base layer predictor, Pb, and a second weight associated with an enhancement layer predictor, Pe, wherein: the base layer predictor, Pb, is formed using reconstructed texture from a base layer block to predict the texture of a corresponding enhancement layer block, and the enhancement layer predictor, Pe, is formed using intra prediction of an enhancement layer block from a neighboring block of reconstructed pixels; encoding a current pixel in the frame of the enhancement layer based on a final predictor, Pf, wherein the final predictor, Pf, comprises a combination of the base layer predictor, Pb, weighted according to the first weight and the enhancement layer predictor, Pe, weighted according to the second weight, characterized in that: the first weight and the second weight are determined as a function of a distance between the current encoded pixel location in a current enhancement layer block and a border (702, 706) of a neighboring enhancement layer block, and wherein: the second weight generally increases for pixels closer to the border; the first weight generally increases for pixels farther from the border; and for each pixel location, the first weight and the second weight sum to a predetermined constant of 1. obtaining video information associated with a base layer and a corresponding enhancement layer; determining a first weight associated with a base layer predictor, Pb, and a second weight associated with an enhancement layer predictor, Pe, wherein: the base layer predictor, Pb, is formed using reconstructed texture from a base layer block to predict the texture of a corresponding enhancement layer block, and the enhancement layer predictor, Pe, is formed using intra prediction of an enhancement layer block from a neighboring block of reconstructed pixels; encoding a current pixel in the frame of the enhancement layer based on a final predictor, Pf, wherein the final predictor, Pf, comprises a combination of the base layer predictor, Pb, weighted according to the first weight and the enhancement layer predictor, Pe, weighted according to the second weight, characterized in that: the first weight and the second weight are determined as a function of a distance between the current encoded pixel location in a current enhancement layer block and a border (702, 706) of a neighboring enhancement layer block, and wherein: the second weight generally increases for pixels closer to the border; the first weight generally increases for pixels farther from the border; and for each pixel location, the first weight and the second weight sum to a predetermined constant of 1. the base layer predictor, Pb, is formed using reconstructed texture from a base layer block to predict the texture of a corresponding enhancement layer block, and the enhancement layer predictor, Pe, is formed using intra prediction of an enhancement layer block from a neighboring block of reconstructed pixels; encoding a current pixel in the frame of the enhancement layer based on a final predictor, Pf, wherein the final predictor, Pf, comprises a combination of the base layer predictor, Pb, weighted according to the first weight and the enhancement layer predictor, Pe, weighted according to the second weight, characterized in that: the first weight and the second weight are determined as a function of a distance between the current encoded pixel location in a current enhancement layer block and a border (702, 706) of a neighboring enhancement layer block, and wherein: the second weight generally increases for pixels closer to the border; the first weight generally increases for pixels farther from the border; and for each pixel location, the first weight and the second weight sum to a predetermined constant of 1. the second weight generally increases for pixels closer to the border; the first weight generally increases for pixels farther from the border; and for each pixel location, the first weight and the second weight sum to a predetermined constant of 1.