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bzip2 is a resource hog. It soaks up large amounts of CPU cycles and memory. Also, it gives very large latencies. In the worst case, you can feed many megabytes of uncompressed data into the library before getting any compressed output, so this probably rules out applications requiring interactive behaviour.
These aren't faults of my implementation, I hope, but more an intrinsic property of the Burrows-Wheeler transform (unfortunately). Maybe this isn't what you want.
If you want a compressor and/or library which is faster, uses less memory but gets pretty good compression, and has minimal latency, consider Jean-loup Gailly's and Mark Adler's work, zlib-1.2.1 and gzip-1.2.4. Look for them at http://www.zlib.org and http://www.gzip.org respectively.
For something faster and lighter still, you might try Markus F X J Oberhumer's LZO real-time compression/decompression library, at http://www.oberhumer.com/opensource.
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