Motion-compensating long-term memory prediction extends the spatial displacement utilized in block-based hybrid video coding by a variable time delay permitting the use of more frames than the previously decoded one for motion compensaition. The long-term memory covers the decoded frames of some seconds at encoder and decoder. We investigate the influence of memory size in our motion compensation scheme and analyze the trade-off between the bit-rates spent for motion compensated prediction and residual coding. Simulation results are obtained by integrating long-term memory prediction into an H.263 codec. PSNR improvements up to 2 dB for the Foreman sequence and 1.5 dB for the Mother-Daughter sequence are demonstrated in comparison to the TMN-2.0 H.263 coder.