This paper presents the results of a study in data compression of adaptive delta modulated video signals. The Song mode ADM is first investigated at a sampling rate of 16 Mbits/s and shown not to produce enough redundancy to warrant entropy encoding. We then present a modified adaptive delta modulator algorithm that operates at a sampling rate of 16 Mbits/s and does produce sufficient redundancy to yield a 40-50 percent data compression by using a simple code on 4 bit data blocks. Other techniques such as field interpolation and direct substitution are shown to increase the possible data compression further without noticeable degradation in the two input images used in this investigation. The effects of channel errors in the transmission of packet video over a computer network are considered. A leaky integrator is used to reduce the effects of channel errors in the data bits. We show that the effects of channel errors can be reduced by field interpolating those packets that can be shown to contain errors.