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Use of bzip2, which is intended to replace bzip, is recommended.
The algorithms used in bzip2 are different and incompatible with
those used in bzip.  To open .bz archives, you must use bzip, and
to open .bz2 archives you must use bzip2.  Although bzip2 sometimes
yields slightly larger output, it is faster, more reliable, maintained,
much more widely used and is believed to be patent-free.

Julian Seward, the author of bzip, gives this warning:

    This program may or may not infringe certain US patents
    pertaining to arithmetic coding and to the block-sorting
    transformation itself.  Opinions differ as to the precise
    legal status of some of the algorithms used.  Nevertheless,
    you should be aware that commercial use of this program
    could render you liable to unfriendly legal action.

WWW: http://bsdforge.com/projects/archivers/bzip/