A good place to turn for additional theoretical and practical information on compression is at the <comp.compression> FAQ:
<http://www.faqs.org/faqs/compression-faq/>
A research article on word-based Huffman encoding inspired my simple example of word-based compression. The article "Fast and Flexible Word Searching on Compressed Text," by Edleno Silva de Moura, Gonzalo Navarro, Nivio Ziviani, and Ricardo Baeza-Yates, can be found at:
<http://citeseer.nj.nec.com/silvademoura00fast.html>