LZH stands for Lempel-Ziv-Huffman, and is the extension used by the archiver LHA (formerly known as LHarc), written by Dr. Yoshizaki. The format was quite prevalent in the BBS days and still remains popular among Amiga users and Japanese computer users.
This format probably was the first to use a combination of a sliding dictionary followed by multiple Huffman trees (one for data that wasn't compressed by the dictionary, one for the dictionary offset, and one for the match length). Most archivers today use this algorithm.
The format and associated program are public domain, and the sources of the MS-DOS version (100% x86 assembler) can be obtained.