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Can we do anything to improve the search algorithm?  

Well, what does "improve" mean?

 * Find smaller matches

 * Find matches with equal accuracy but with less checksum data

What about not storing the strong checksum for every single block, but
at less frequent intervals.  That way we could optimistically match on
only the shorter weak checksum, and then back up and send the literal
data if it doesn't match.  This would reduce the amount of signature
data, at the expense of sometimes sending literal data when we should
have been able to match.