One of the goals of telemedicine is to enable remote visualization and browsing of medical volumes. There is a need to employ scalable compression schemes and efficient client-server models to obtain interactivity and an enhanced viewing experience. First, we present a scheme that uses JPEG2000 and JPIP (JPEG2000 Interactive Protocol) to transmit data in a multi-resolution and progressive fashion. The server exploits the spatial locality offered by the wavelet transform and packet indexing information to transmit, in so far as possible, compressed volume data relevant to the clients query. Once the client identifies its volume of interest (VOI), the volume is refined progressively within the VOI from an initial lossy to a final lossless representation. Contextual background information can also be made available having quality fading away from the VOI. Second, we present a prioritization that enables the client to progressively visualize scene content from a compressed file. In our specific example, the client is able to make requests to progressively receive data corresponding to any tissue type. The server is now capable of reordering the same compressed data file on the fly to serve data packets prioritized as per the client's request. Lastly, we describe the effect of compression parameters on compression ratio, decoding times and interactivity. We also present suggestions for optimizing JPEG2000 for remote volume visualization and volume browsing applications. The resulting system is ideally suited for client-server applications with the server maintaining the compressed volume data, to be browsed by a client with a low bandwidth constraint.