Xvnc can basically operate on the X level: The Xvnc server is aware of which drawing operation is performed. For example, it can instruct the client to move an existing rectangle, rather than repaint/resend it.
Still, there are many more techniques (including caching) that could be added to VNC to enhance performance even further. Prototypes are already available.
NX memory usage is also significantly better. This makes a difference if you run a lot of desktops. My largest server (server in this context meaning the machine running the actual apps) runs about 65 simultaneous Gnome sessions.
Compared to what? As far as I know, GNOME uses the same amount of memory regardless of if the Xserver is Xvnc or the NX one. It is really GNOME and its applications that consumes the memory; not the Xserver. Not with Xvnc, at least.
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