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In dual frame video coding, one short-term reference frame (STR) and one long-term reference frame (LTR) are available for motion compensation. The STR is the previous frame of current frame. The LTR remains static for a few frames, and then jump forward. In this paper, for different GOP length and bits allocation of the LTR, the coding performance of dual frame motion compensation is analyzed. And during the video transmission over noisy channel, the error propagation of dual frame motion compensation is analyzed. Finally the analysis is proved by the experimental results.