“What I’d heard from ex-on2 folks was that there is some philosophical disagreement about how to optimize [encoder] tuning, and the tune for PSNR camp mostly won out.“ Apparently around the time of VP6, On2 went the full-retard route and optimized purely for PSNR, completely ignoring visual considerations. This explains quite well why VP7 looked so blurry and ugly." -- http://x264dev.multimedia.cx/?p=292