i think jpeg2000 isn’t superior to jpeg. it doesn’t suffer from blocking artifacts but usually removes much more detailt and introduces much more blurring. standard jpeg with right preprocessing (smoothing of luma and chroma planes and downsampling if necessary), optimized quantization tables, dct position dependent entropy coder and good postprocessing filter (like this presented above) gives much higher visual quality than jpeg2000 at usual bitrates (0.5 bpp and above).

the biggest advantage of jpeg2000 over standard jpeg is its scalability (jpeg2000 doesn’t need to downsample input data to compress better). the biggest disdvantage is poor performance - todays jpeg2000 coders are much slower (about 5x or so) and requires much more memory than baseline jpeg.

overall, jpeg2000 isn’t worth consideration. better improve baseline jpeg and use stuffit technology instead of simple huffman coder and old jpeg will be working fine.

1st. low bit rates can improved by using downsampling. Less artifact are visual if you resize the image to 70 % of the original and compress it using jpeg. You have to resize it back to the original size to see the results.

2nd. You can remove the artifact by using a postprocessing filter.
This one works very well.
http://www.compression.ru/video/deblocking/smartdeblocking_en.html

The real question is if IE7 and Vista will support it.