Conventional image restoration filters, such as Wiener filter, often exhibit either noise amplification or over-smoothing problem. On the other hand, advanced image restoration techniques, such as iterative regularization or combined Fourier and wavelet domain thresholding techniques, is not suitable for real-time application because of high computational overhead. For overcoming these problems, we adopt vaguelette-wavelet decomposition (VWD) approach to realtime, space-frequency adaptive image restoration based on the estimated point spread-function (PSF) and directional wavelet bases.