Two topics that have been prominent at recent IS&T Archiving Conferences have been OAIS and JPEG2000. OAIS stands for Open Archival Information System; JPEG2000 is a wavelet-based image compression standard from the JPEG committee. While use of JPEG2000 is growing in image archiving systems, its use is seldom described in the context of the OAIS model. This paper will describe the use of JPEG2000 in the context of the OAIS Information Packages and their requirements. It will report on the practical use of JPEG2000 data and files in an OAIS-based image archiving system, with a special focus on the choices made for JPEG2000 content in the Archival Information Package (AIP), and how they affect downstream performance when content is disseminated to the consumer in the OAIS model in the form of a Dissemination Information Package (DIP). The encoding parameters can affect both the ability of the AIP to meet the requirements of the archival system and the efficiency of the transformations between AIPs and DIPs, especially when the DIPs are not precomputed but derived on demand to meet consumer requests.