This correspondence presents an improved version of an algorithm designed to perform image restoration via nonlinear interpolative vector quantization (NLIVQ). The improvement results from using lapped blocks during the decoding process. The algorithm is trained on original and diffraction-limited image pairs. The discrete cosine transform is again used in the codebook design process to control complexity. Simulation results are presented which demonstrate improvements over the nonlapped algorithm in both observed image quality and peak signal-to-noise ratio. In addition, the nonlinearity of the algorithm is shown to produce super-resolution in the restored images.