The DWT is related to Multiresolution analysis, which provides an orthogonal set of multiresolution elements (different levels of approximations) of a signal

or image for a given wavelet basis. The EMD, on the other hand, is a decomposition procedure based on signal features and does not depend on a function basis. The EMD provides a set of components called Intrinsic Mode Functions (IMFs) and a residual trend. IMFs share some similarities with wavelet multiresolution analysis, but their are only approximately orthogonal. Wavelet multiresolution analysis gives a nonredundant representation, thus it is generally used for compressing information. EMD has been mostly applied in analysis of time-depend nonlinear signals, since it is argued that, due its adaptiveness, IMFs can capture reasonably well the physics of each time-scale.

EMD (or probably more useful Ensemble EMD EEMD) originates from very hands-on physical observations and thus the IMFs are thought to have a physical meaning and are originating from the signal itself - no prior orthogonal function set needed etc... As far as I know, this method is not quite well established for online signal processing.... While EMD, Fourier, and wavelets are all used to decompose signals, EMD is fundamentally different from the other two. With both the Fourier and Wavelet transforms, one selects a set of basis signal components and then calculates the parameters for each of these signals such that the their aggregate will compose the original signal. The Fourier transform specifically uses sinusoids (and calculates the amplitude and phase offset for each) while the wavelet transform uses other more complex and orthogonal wave-forms. On the other hand, EMD makes no assumptions a priori about the composition of the signal. Rather, it uses spline interpolation between maxima and minima to successively trace out "Intrinsic Mode Functions". Each IMF will be a single periodic oscillator, but otherwise cannot be predicted before it is empirically observed from the signal. Also, the number of IMFs cannot be predicted before the decomposition. These two disadvantages can make EMD difficult to work with under certain circumstances. However, since it makes no assumptions about signal, the results *might* be more meaningful. Also, since the IMFs can change over time, EMD makes no assumptions about the stationarity of the signal (or the signal components) and is therefore better suited to non-linear signals than either Fourier or Wavelets. This makes EMD particularly attractive when analyzing signals from complex systems; for instance in bio-signal analysis. Another point of care is that, to the best of my knowledge, there isn't a standardized online (streaming) solution for EMD yet. The difficulties with such a technique derive from the unpredictable number of IMFs per decomposition and the end-effects caused by the spline interpolation. The endeffects can usually be dealt with by buffering the data stream. The number of IMFs is an insurmountable problem for basic EMD, since each successive time window may have a different number of IMFs and, even if they don't, the IMFs from one window are unlikely to align with those from the next. Since Wavelets (like Fourier) have a constant number of basis components, they are currently much better suited to online decomposition.