zsync 0.2.0 is now released. This is a major overhaul of the underlying rsync algorithm, using ideas taken from Improved Single-Round Protocols for Remote File Synchronization. Changes to the control file have cut it by around 60-70% in size. I think this will significantly improve the effectiveness of zsync, as it is now very close to rsync for efficiency, and this change enables smaller blocksizes to be used where they were prohibitive before. Even a blocksize of 512 bytes is practical for many files now.
I have updated the technical paper with new figures for uncompressed transfers, and I have increased the comparison with rsync too. I have yet to update the section on compressed transfers. It is likely that this improvement will have significantly changed the picture for compressed transfers; it would not surprise me is the look-inside method is no longer better than simply using rsyncable gzip files, because the overhead of transmitting a map of the compressed data starts to look much larger relative to the other metadata now.
The client is backward compatible with older control files. Old clients are not forward compatible with newer control files, though. I will leave the streams on this site int eh old format for a week or two before I switch over.