Modern compression methods use both I-frames ("image frames") and P-frames ("predicted frames"), and sometimes B-frames (bidirectionally predicted frames, using data from following frames as well as previous ones). I-frames are basically just standalone images, and are used to provide periodic starting points for decoding.
Right, and this is why channel-changing is so annoyingly slow on most digital TV systems (cable, broadcast and satellite). The RF tuners, demodulators and error correctors usually change very quickly, but the MPEG decoder has to wait for those I frames before it can start producing decoded video. They're big, so getting a good compression ratio may limit them to once every few seconds.
AT&T U-verse, which uses Microsoft's IPTV system, has an interesting way around this problem. Although the video channels are sent using Internet multicast, which is much like broadcasting with everyone getting a copy of a single data stream, for the first couple seconds after you change the channel you are sent your own unicast (private) version of the new channel structured such that the decoder can almost immediately start producing video. If you stay on the channel, the set-top box joins the appropriate multicast group and switches seamlessly to it.
You can often tell by looking how often I frames are sent. Watch the compression artifacts in a solid area, preferably black. They're usually fairly static with just a few random changes between frames, but then the artifacts will suddenly change to a different pattern that again remains fairly static for a few seconds. Each of those sudden changes corresponds to an I frame where the whole scene is re-encoded from scratch, with the slight amount of noise generating a different set of random compression artifacts. The smaller changes that occur on every video frame are the result of modifications by the in-between frames modifying only a few parts of the image at any time.
If you for some reason miss an I-frame due to corruption or other issues, you can end up with the decoder out of sync, decoding using differences from a substantially different image than intended.
Yes, but this usually produces very dramatic and obvious artifacts, and I assumed that's not what Tedward was seeing. It sounds like he was seeing the ordinary compression artifacts.