A quick perusal of the source indicates that the algorithm hinges on the predictive encoding strategies in this file: http://gitorious.org/imagezero/imagezero/

A quick perusal of the source indicates that the algorithm hinges on the predictive encoding strategies in this file: http://gitorious.org/imagezero/imagezero/blobs/master/pixel.h http://gitorious.org/imagezero/imagezero/blobs/master/pixel.... Without comments the specifics are still somewhat mysterious, though.