diff --git a/drivers/media/video/pwc/pwc-ctrl.c b/drivers/media/video/pwc/pwc-ctrl.c
index 6b9c97f..905d41d 100644
--- a/drivers/media/video/pwc/pwc-ctrl.c
+++ b/drivers/media/video/pwc/pwc-ctrl.c
@@ -168,7 +168,8 @@
 		request, value, pdev->vcinterface, buf, buflen);
 }
 
-static int set_video_mode_Nala(struct pwc_device *pdev, int size, int frames)
+static int set_video_mode_Nala(struct pwc_device *pdev, int size, int frames,
+			       int *compression)
 {
 	unsigned char buf[3];
 	int ret, fps;
@@ -234,32 +235,35 @@
 	}
 	else
 		pdev->vbandlength = 0;
+
+	/* Let pwc-if.c:isoc_init know we don't support higher compression */
+	*compression = 3;
+
 	return 0;
 }
 
 
 static int set_video_mode_Timon(struct pwc_device *pdev, int size, int frames,
-	int compression)
+	int *compression)
 {
 	unsigned char buf[13];
 	const struct Timon_table_entry *pChoose;
 	int ret, fps;
 
-	if (size >= PSZ_MAX || frames < 5 || frames > 30 || compression < 0 || compression > 3)
+	if (size >= PSZ_MAX || frames < 5 || frames > 30 ||
+	    *compression < 0 || *compression > 3)
 		return -EINVAL;
 	if (size == PSZ_VGA && frames > 15)
 		return -EINVAL;
 	fps = (frames / 5) - 1;
 
-	/* Find a supported framerate with progressively higher compression ratios
-	   if the preferred ratio is not available.
-	*/
+	/* Find a supported framerate with progressively higher compression */
 	pChoose = NULL;
-	while (compression <= 3) {
-	   pChoose = &Timon_table[size][fps][compression];
-	   if (pChoose->alternate != 0)
-	     break;
-	   compression++;
+	while (*compression <= 3) {
+		pChoose = &Timon_table[size][fps][*compression];
+		if (pChoose->alternate != 0)
+			break;
+		(*compression)++;
 	}
 	if (pChoose == NULL || pChoose->alternate == 0)
 		return -ENOENT; /* Not supported. */
@@ -293,27 +297,25 @@
 
 
 static int set_video_mode_Kiara(struct pwc_device *pdev, int size, int frames,
-	int compression)
+	int *compression)
 {
 	const struct Kiara_table_entry *pChoose = NULL;
 	int fps, ret;
 	unsigned char buf[12];
 
-	if (size >= PSZ_MAX || frames < 5 || frames > 30 || compression < 0 || compression > 3)
+	if (size >= PSZ_MAX || frames < 5 || frames > 30 ||
+	    *compression < 0 || *compression > 3)
 		return -EINVAL;
 	if (size == PSZ_VGA && frames > 15)
 		return -EINVAL;
 	fps = (frames / 5) - 1;
 
-	/* Find a supported framerate with progressively higher compression
-	   ratios if the preferred ratio is not available.
-	   Skip this step when using RAW modes.
-	*/
-	while (compression <= 3) {
-		pChoose = &Kiara_table[size][fps][compression];
+	/* Find a supported framerate with progressively higher compression */
+	while (*compression <= 3) {
+		pChoose = &Kiara_table[size][fps][*compression];
 		if (pChoose->alternate != 0)
 			break;
-		compression++;
+		(*compression)++;
 	}
 	if (pChoose == NULL || pChoose->alternate == 0)
 		return -ENOENT; /* Not supported. */
@@ -352,7 +354,7 @@
 }
 
 int pwc_set_video_mode(struct pwc_device *pdev, int width, int height,
-	int frames, int compression)
+	int frames, int *compression)
 {
 	int ret, size;
 
@@ -361,7 +363,7 @@
 	PWC_TRACE("decode_size = %d.\n", size);
 
 	if (DEVICE_USE_CODEC1(pdev->type)) {
-		ret = set_video_mode_Nala(pdev, size, frames);
+		ret = set_video_mode_Nala(pdev, size, frames, compression);
 
 	} else if (DEVICE_USE_CODEC3(pdev->type)) {
 		ret = set_video_mode_Kiara(pdev, size, frames, compression);
@@ -373,7 +375,6 @@
 		PWC_ERROR("Failed to set video mode %s@%d fps; return code = %d\n", size2name[size], frames, ret);
 		return ret;
 	}
-	pdev->vcompression = compression;
 	pdev->frame_total_size = pdev->frame_size + pdev->frame_header_size + pdev->frame_trailer_size;
 	PWC_DEBUG_SIZE("Set resolution to %dx%d\n", pdev->width, pdev->height);
 	return 0;
diff --git a/drivers/media/video/pwc/pwc-if.c b/drivers/media/video/pwc/pwc-if.c
index be4406a..943d37a 100644
--- a/drivers/media/video/pwc/pwc-if.c
+++ b/drivers/media/video/pwc/pwc-if.c
@@ -134,7 +134,6 @@
 #endif
 static int power_save = -1;
 static int led_on = 100, led_off; /* defaults to LED that is on while in use */
-static int pwc_preferred_compression = 1; /* 0..3 = uncompressed..high */
 static struct {
 	int type;
 	char serial_number[30];
@@ -372,6 +371,7 @@
 	int i, j, ret;
 	struct usb_interface *intf;
 	struct usb_host_interface *idesc = NULL;
+	int compression = 0; /* 0..3 = uncompressed..high */
 
 	if (pdev->iso_init)
 		return 0;
@@ -383,6 +383,12 @@
 	pdev->visoc_errors = 0;
 	udev = pdev->udev;
 
+retry:
+	/* We first try with low compression and then retry with a higher
+	   compression setting if there is not enough bandwidth. */
+	ret = pwc_set_video_mode(pdev, pdev->width, pdev->height,
+				 pdev->vframes, &compression);
+
 	/* Get the current alternate interface, adjust packet size */
 	intf = usb_ifnum_to_if(udev, 0);
 	if (intf)
@@ -405,9 +411,12 @@
 	}
 
 	/* Set alternate interface */
-	ret = 0;
 	PWC_DEBUG_OPEN("Setting alternate interface %d\n", pdev->valternate);
 	ret = usb_set_interface(pdev->udev, 0, pdev->valternate);
+	if (ret == -ENOSPC && compression < 3) {
+		compression++;
+		goto retry;
+	}
 	if (ret < 0)
 		return ret;
 
@@ -451,6 +460,12 @@
 	/* link */
 	for (i = 0; i < MAX_ISO_BUFS; i++) {
 		ret = usb_submit_urb(pdev->urbs[i], GFP_KERNEL);
+		if (ret == -ENOSPC && compression < 3) {
+			compression++;
+			pdev->iso_init = 1;
+			pwc_isoc_cleanup(pdev);
+			goto retry;
+		}
 		if (ret) {
 			PWC_ERROR("isoc_init() submit_urb %d failed with error %d\n", i, ret);
 			pdev->iso_init = 1;
@@ -743,14 +758,16 @@
 
 	/* Turn on camera and set LEDS on */
 	pwc_camera_power(pdev, 1);
-	if (pdev->power_save) {
-		/* Restore video mode */
-		pwc_set_video_mode(pdev, pdev->width, pdev->height,
-				   pdev->vframes, pdev->vcompression);
-	}
 	pwc_set_leds(pdev, led_on, led_off);
 
 	r = pwc_isoc_init(pdev);
+	if (r) {
+		/* If we failed turn camera and LEDS back off */
+		pwc_set_leds(pdev, 0, 0);
+		pwc_camera_power(pdev, 0);
+		/* And cleanup any queued bufs!! */
+		pwc_cleanup_queued_bufs(pdev);
+	}
 leave:
 	mutex_unlock(&pdev->udevlock);
 	return r;
@@ -798,6 +815,7 @@
 	int vendor_id, product_id, type_id;
 	int hint, rc;
 	int features = 0;
+	int compression = 0;
 	int video_nr = -1; /* default: use next available device */
 	int my_power_save = power_save;
 	char serial_number[30], *name;
@@ -1068,7 +1086,6 @@
 	INIT_LIST_HEAD(&pdev->queued_bufs);
 
 	pdev->udev = udev;
-	pdev->vcompression = pwc_preferred_compression;
 	pdev->power_save = my_power_save;
 
 	/* Init videobuf2 queue structure */
@@ -1121,8 +1138,8 @@
 	pwc_set_leds(pdev, 0, 0);
 
 	/* Setup intial videomode */
-	rc = pwc_set_video_mode(pdev, MAX_WIDTH, MAX_HEIGHT,
-				pdev->vframes, pdev->vcompression);
+	rc = pwc_set_video_mode(pdev, MAX_WIDTH, MAX_HEIGHT, pdev->vframes,
+				&compression);
 	if (rc)
 		goto err_free_mem;
 
@@ -1227,7 +1244,6 @@
  */
 
 static int fps;
-static int compression = -1;
 static int leds[2] = { -1, -1 };
 static unsigned int leds_nargs;
 static char *dev_hint[MAX_DEV_HINTS];
@@ -1238,7 +1254,6 @@
 module_param_named(trace, pwc_trace, int, 0644);
 #endif
 module_param(power_save, int, 0644);
-module_param(compression, int, 0444);
 module_param_array(leds, int, &leds_nargs, 0444);
 module_param_array(dev_hint, charp, &dev_hint_nargs, 0444);
 
@@ -1247,7 +1262,6 @@
 MODULE_PARM_DESC(trace, "For debugging purposes");
 #endif
 MODULE_PARM_DESC(power_save, "Turn power saving for new cameras on or off");
-MODULE_PARM_DESC(compression, "Preferred compression quality. Range 0 (uncompressed) to 3 (high compression)");
 MODULE_PARM_DESC(leds, "LED on,off time in milliseconds");
 MODULE_PARM_DESC(dev_hint, "Device node hints");
 
@@ -1281,14 +1295,6 @@
 		PWC_DEBUG_MODULE("Default framerate set to %d.\n", default_fps);
 	}
 
-	if (compression >= 0) {
-		if (compression > 3) {
-			PWC_ERROR("Invalid compression setting; use a number between 0 (uncompressed) and 3 (high).\n");
-			return -EINVAL;
-		}
-		pwc_preferred_compression = compression;
-		PWC_DEBUG_MODULE("Preferred compression set to %d.\n", pwc_preferred_compression);
-	}
 	if (leds[0] >= 0)
 		led_on = leds[0];
 	if (leds[1] >= 0)
diff --git a/drivers/media/video/pwc/pwc-v4l.c b/drivers/media/video/pwc/pwc-v4l.c
index 097ec58..36da7d4 100644
--- a/drivers/media/video/pwc/pwc-v4l.c
+++ b/drivers/media/video/pwc/pwc-v4l.c
@@ -469,7 +469,7 @@
 static int pwc_s_fmt_vid_cap(struct file *file, void *fh, struct v4l2_format *f)
 {
 	struct pwc_device *pdev = video_drvdata(file);
-	int ret, pixelformat;
+	int ret, pixelformat, compression = 0;
 
 	if (pwc_test_n_set_capt_file(pdev, file))
 		return -EBUSY;
@@ -497,19 +497,15 @@
 	}
 
 	PWC_DEBUG_IOCTL("Trying to set format to: width=%d height=%d fps=%d "
-			"compression=%d format=%c%c%c%c\n",
+			"format=%c%c%c%c\n",
 			f->fmt.pix.width, f->fmt.pix.height, pdev->vframes,
-			pdev->vcompression,
 			(pixelformat)&255,
 			(pixelformat>>8)&255,
 			(pixelformat>>16)&255,
 			(pixelformat>>24)&255);
 
-	ret = pwc_set_video_mode(pdev,
-				 f->fmt.pix.width,
-				 f->fmt.pix.height,
-				 pdev->vframes,
-				 pdev->vcompression);
+	ret = pwc_set_video_mode(pdev, f->fmt.pix.width, f->fmt.pix.height,
+				 pdev->vframes, &compression);
 
 	PWC_DEBUG_IOCTL("pwc_set_video_mode(), return=%d\n", ret);
 
diff --git a/drivers/media/video/pwc/pwc.h b/drivers/media/video/pwc/pwc.h
index 5d01385..47c518f 100644
--- a/drivers/media/video/pwc/pwc.h
+++ b/drivers/media/video/pwc/pwc.h
@@ -243,7 +243,6 @@
 	int vmax_packet_size;	/* USB maxpacket size */
 	int vlast_packet_size;	/* for frame synchronisation */
 	int visoc_errors;	/* number of contiguous ISOC errors */
-	int vcompression;	/* desired compression factor */
 	int vbandlength;	/* compressed band length; 0 is uncompressed */
 	char vsync;		/* used by isoc handler */
 	char vmirror;		/* for ToUCaM series */
@@ -365,7 +364,7 @@
 /** Functions in pwc-ctrl.c */
 /* Request a certain video mode. Returns < 0 if not possible */
 extern int pwc_set_video_mode(struct pwc_device *pdev, int width, int height,
-			      int frames, int compression);
+			      int frames, int *compression);
 extern unsigned int pwc_get_fps(struct pwc_device *pdev, unsigned int index, unsigned int size);
 extern int pwc_set_leds(struct pwc_device *pdev, int on_value, int off_value);
 extern int pwc_get_cmos_sensor(struct pwc_device *pdev, int *sensor);