  We formulate quantum rate-distortion theory in the most general setting where
classical side information is included in the tradeoff. Using a natural
distortion measure based on entanglement fidelity and specializing to the case
of an unrestricted classical side channel, we find the exact quantum
rate-distortion function for a source of isotropic qubits. An upper bound we
believe to be exact is found in the case of biased sources. We establish that
in this scenario optimal rate-distortion codes produce no entropy exchange with
the environment of any individual qubit.
