Multiple State Video Coding (MSVC) is a Multiple Description Coding Scheme where the video is coded into multiple independently decodable streams, each with its own prediction process and state. The system subject to this work is composed of two subsystems: 1- multiple state encoding/decoding, 2- path diversity transmission system. In [1] we discussed how to optimize the rate allocation of such a system while maximizing the average reconstructed frame PSNR at the decoder and minimizing the PSNR variations between the streams given the total bitrate R-T and the balanced (equal loss probabilities) or unbalanced (unequal) loss probabilities pi and p(2) over the two paths. In our current work we establish a theoretical framework to estimate the rate(decoder) distortion (R-Dd) function and have taken into account the MSVC-structure, the rate allocation, channel impairments and reconstruction strategies respectively. The video sequence is modeled as an AR(1) source and the distortion associated with each reconstructed frame in both threads in a lossy transmission environment is estimated recursively depending on the system parameters.