Hi,
I talked with the xz developer in IRC and he helped me to reduce memory usage.
The problem was, that compressing with lzma with 9 uncompressing needs about 65MB of RAM. The needed memory is in fact dependend of used compression level. Using level 3 reduced the memory usage to about 1,5MB, that it works now on the NanoNote. There is a additional flag LZMA_PRESET_EXTREME, which makes compressing slower but compression ratio better. Using 3 + extreme results in a file, which works on Nanonote while the size is almost identical with 9 or bzip2.
Uncompressing bzip2 chunks take about 2 seconds while lzma needs 0,5 seconds on the nanonote. So we keep the size while improving speed with the factor 4!!!
Have a good Year.
Tommi