Finding the minimum length RLE

Question

The classical RLE algorithm compresses data by using numbers to represent how many times the character following a number appears in the text at that position. For example:

Answer 1

Very clever ways of finding matching substrings may lead to considering suffix trees and suffix arrays. Thinking about suffix arrays and compression may lead you to the http://en.wikipedia.org/wiki/Burrows%E2%80%93Wheeler_transform. That may be the most elegant way of souping up run length encoding.