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H.264/AVC is a new standard for digital video compression jointly developed by ITU-T’s Video Coding Experts Group (VCEG) and ISO/IEC’s Moving Picture Experts Group (MPEG). Besides the numerous tools for efficient video coding, the H.264/AVC specification defines some new error resilience tools. One of them is flexible macroblock ordering (FMO) which is the main focus of this paper. An in-depth overview is given of the internals of FMO. Experiments are presented that demonstrate the benefits of FMO as an error resilience tool in case of packet loss over IP networks. The flexibility of FMO comes with a certain overhead or cost. A quantitative assessment of this cost is presented for a number of scenarios. FMO can, besides for pure error resilience, also be used for other purposes. This is also addressed in this paper.