This article is from the DVD Formats FAQ, by jtfrog@usa.net (Jim Taylor) with numerous contributions by others.
Some people claim that animation, especially hand-drawn cell animation such
as cartoons and anime, does not compress well with MPEG-2 or even ends up
larger than the original. Other people claim that animation is simple so it
compresses better. Neither is true.
Supposedly the "jitter" between frames caused by differences in the
drawings or in their alignment causes problems. An animation expert at
Disney pointed out that this doesn't happen with modern animation
techniques. And even if it did, the motion estimation feature of MPEG-2
would compensate for it.
Because of the way MPEG-2 breaks a picture into blocks and transforms them
into frequency information it can have a problem with the sharp edges
common in animation. This loss of high-frequency information can show up as
"ringing" or blurry spots along edges (called the Gibbs effect). However,
at the data rates commonly used for DVD this problem does not occur.
 
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