A method of enhancing picture quality of a video signal is disclosed. The method comprises the steps of receiving base layer images of standard definition pictures from a base layer decoder; defining image areas of the standard definition pictures; classifying image areas into image types by assigning a class number; and generating enhanced pictures based upon the standard definition pictures and the classification of the image areas. A circuit for enhancing picture quality of a video signal is also disclosed. The circuit comprising a base layer decoder; a classifier coupled to the base layer decoder, the classifier generating a class number for image areas of a standard definition picture; a summing circuit coupled to the classifier; an exchange stream decoder coupled to the summing circuit, the exchange stream decoder generating an index; and a codebook table coupled to the summing circuit. The codebook table preferably stores a plurality of codevectors based upon the class number and the index.