Reversible watermarking is a technique for embedding data in a digital host signal in such a manner that the original host signal can be restored in a bit-exact manner in the restoration process. In this paper, we present a general framework for reversible watermarking in multi-media signals. A mapping function, which is in general neither injective nor surjective, is used to map the input signal to a perceptually equivalent output signal. The resulting unused sample values of the output signal are used to encode additional (watermark) information and restoration data. At the 2003 SPIE conference, examples of this technique applied to digital audio were presented. In this paper we concentrate on color and gray-scale images. A particular challenge in this context is not only the optimization of rate-distortion, but also the measure of perceptual quality (i.e. the distortion). In literature distortion is often expressed in terms of PSNR, making comparison among different techniques relatively straightforward. We show that our general framework for reversible watermarking applies to digital images and that results can be presented in terms of PSNR rate-distortions. However, the framework allows for more subtle signal manipulations that are not easily expressed in terms of PSNR distortion. These changes involve manipulations of contrast and/or saturation.