In this paper we investigate the utilization of visual saliency maps for ROI-based video coding of video-telephony applications. Visually salient areas indicated in the saliency map are considered as ROIs. These areas are automatically detected using an algorithm for visual attention (VA) which builds on the bottom-up approach proposed by Itti et al. A top-down channel emulating the visual search for human faces performed by humans has been added, while orientation, intensity and color conspicuity maps are computed within a unified multi-resolution framework based on wavelet subband analysis. Priority encoding, for experimentation purposes, is utilized in a simple manner: Frame areas outside the priority regions are blurred using a smoothing filter and then passed to the video encoder. This leads to better compression of both Intra-coded (I) frames (more DCT coefficients are zeroed in the DCT-quantization step) and Inter coded (P,B) frames (lower prediction error). In more sophisticated approaches, priority encoding could be incorporated by varying the quality factor of the DCT quantization table. Extended experiments concerning both static images as well as low-quality video show the compression efficiency of the proposed method. The comparisons are made against standard JPEG and MPEG-1 encoding respectively.