New Image Compression Algorithm claims 1000:1 ratio

ATT Research has introduced yet another picture format, djvu, which claims up to 1000:1 compression ratio. The method employed is to separate the image into to layers. The foreground contains the parts of the picture that have sharp edges, but contain few colours, such as text. It is compressed using a bi-level compression technique. The background contains the parts of the picture that vary smoothely, but contain many colours. This is compressed using wavelets. A linux binary of the compressor is available for download.