I am told that Huffman coding is used as loseless data compression algorithm, but I am also told that real data compress software do not employ Huffman coding, because if the keys are not distributed decentralized enough, the compressed file could be even larger than the orignal file.
This leaves me wondering are there any real-world application of Huffman coding?
Huffman is widely used in all the mainstream compression formats that you might encounter - from GZIP, PKZIP (winzip etc) and BZIP2, to image formats such as JPEG and PNG.
All compression schemes have pathological data-sets that cannot be meaningfully compressed; the archive formats I listed above simply 'store' such files uncompressed when they are encountered.
Newer arithmetic and range coding schemes are often avoided because of patent issues, meaning Huffman remains the work-horse of the compression industry.