Video stabilization is a video processing technique to enhance the quality of input video by removing the undesired camera motions. There are various approaches used for stabilizing the captured videos. Most of the existing methods are either very complex or does not perform well for slow and smooth motion of hand held mobile videos. Hence it is desired to synthesis a new stabilized video sequence, by removing the undesired motion between the successive frames of the hand held mobile video. Various 2D and 3D motion models used for the motion estimation and stabilization. The paper presents the review of the various motion models, motion estimation methods and the smoothening techniques. Paper also describes the direct pixel based and feature based methods of estimating the inter frame error. Some of the results of the differential motion estimation are also presented. Finally it closes with a open discussion of research problems in the area of motion estimation and stabilization.