This paper presents a wavelet-based image encoding scheme with error resilience and error concealment suitable for transmission over networks prone to packet losses. The scheme involves partitioning the data into independent descriptions of roughly equal lengths, achieved by a combination of packetization and modifications to the wavelet tree structure without additional redundancy. With a weighted-averaging-based interpolation method, our proposed encoding scheme attains an improvement of about 0.5-1.5 dB in PSNR over other similar methods. We also investigate the use of overcomplete wavelet transform coefficients as side information for our encoding scheme to improve the error resilience when severe packet losses occur. Experiments show that we are able to achieve a high coding performance along with a good perceptual quality for the reconstructed image.