How does it work? The first bit is a sign bit. If it's zero, the next seven bits are raw coinflips, 0 for tails, 1 for heads. If it's one, the second bit signifies whether the next sequence consists of heads or tails (again, 0 for tails, 1 for heads), and the remaining six bits tell how long said sequence is.
This is a fairly simple encoding for the strategy described in the article, which I thought of off the top of my head in about five minutes, and I know nothing about compression. It's slightly broken (what if the sequence ends mid-byte?), but it does kind of work. Somebody who actually knows about compression could probably do this better.