  We consider transmitting a source across a pair of independent, non-ergodic
channels with random states (e.g., slow fading channels) so as to minimize the
average distortion. The general problem is unsolved. Hence, we focus on
comparing two commonly used source and channel encoding systems which
correspond to exploiting diversity either at the physical layer through
parallel channel coding or at the application layer through multiple
description source coding.
  For on-off channel models, source coding diversity offers better performance.
For channels with a continuous range of reception quality, we show the reverse
is true. Specifically, we introduce a new figure of merit called the distortion
exponent which measures how fast the average distortion decays with SNR. For
continuous-state models such as additive white Gaussian noise channels with
multiplicative Rayleigh fading, optimal channel coding diversity at the
physical layer is more efficient than source coding diversity at the
application layer in that the former achieves a better distortion exponent.
  Finally, we consider a third decoding architecture: multiple description
encoding with a joint source-channel decoding. We show that this architecture
achieves the same distortion exponent as systems with optimal channel coding
diversity for continuous-state channels, and maintains the the advantages of
multiple description systems for on-off channels. Thus, the multiple
description system with joint decoding achieves the best performance, from
among the three architectures considered, on both continuous-state and on-off
channels.
