Lempel–Ziv–Welch is pretty cute. I love how the decompressor/receiver builds up the dictionary in sync with the compressor/sender at the same point in the datasream without ever needing to store/send the dictionary.
I loved that algorithm because of its elegance and simplicity and also as you pointed out about the data stream. It would be fun to implement this as hardware block and that was what it was intended for i.e. on the fly compression and decompression between interfaces.
