In this paper, an image sequence coding scheme for very low bit-rate video coding is presented. The new technique utilizes windowed overlapped block matching motion compensation for the temporal coding scheme, and scheme, and vector quantization to reduce the spatial redundancy within the predicted image. There are many advantages associated with VQ, especially its capacity to operate in error- resilient coding system and furthermore, VQ does not suffer from blocking effects that are visually disjointed and has therefore a major advantage over DCT based methods. We examine the performance of various codebooks to remove the spatial redundancy within the difference frame. When the codec is configured to operate at 10.1 kbit/s, average PSNR values in excess of 32.86dB and 25.6dB are achieved for the 'Miss America' and 'Carphone' sequences respectively.