Steve,
If you have acess to the Fred Fish disks, there is source for the
program Compress on disk 6 and I think disk 58. Compress uses the LZ method.
How the algorithm works isn't documented in the source, but there are
references to articles pertaining to the LZ algorithm. I get the definite
feeling that it isn't a very easy algorithm to understand, and many have
implemented it w/o understanding how the compression is achieved.
<Glenn