ok, bit busy for a tutorial but heres what i do for those who are eager to try my method
1 - Unpack the 00.app and then the banner.bin and icon.bin with U8Tool by Howardc. Then repack the banner with paradox beta3 banner tools (this does the lz77 on banner and icon quicky and auto, and im not going to go into how to do this manually as it would be over most users heads)
2 - Replace the 02.app from your wad with the 07.app from a resent VC game - will be 306kb (rename to 02.app of course) Why you may ask? Well the latest nand loader in VC games allows for 01.app to be LZ77 compressed
This .app also has the added bonus of fixing that 480p no display issue that myself and others experience with the homebrew 02.app
3 - Using wwcxtool.exe from wwpacker tools (by alpha-0) compress the 01.app using /C1, then replace the old 01.app with the new compressed version
BTW this also works nicely on VC games, especially ones such as SNES since it also allows for the rom and emanual to be lz77 C1 compressed
Hope that makes sense to some, makes for nice little channels
NOTE: I used the sound.bin from Wiiblaster repacked wad, its a nice size. If only we had a GC-DSP ADPCM encoder to use proper compressed sound.bns files