I've completed initial work on the PIFF patch format. This allows us to patch any object in the game with modifications made in the IDE! Right now this only extends to string and tree resources, but soon you will be able to modify basically all chunk types! Above is an example of one such completely useful object modification which was saved to a .piff and automatically reloaded the next time the game was started.
We'll be able to use this to fix bugs with certain objects (such as those you might see in the Terrain Tool which have broken code references or bad strings), add complex features to existing objects and clone existing objects while changing graphics or code (eg. a folded chair reskin that can be picked up by a sim, the limit is really your imagination!) All of this without redistributing any of the original resource, thus all modifications are safe from copyright violations.
Saving to iff directly works too, of course, though I have not set up a way to load arbitrary standalone iffs yet.
The patches themselves use a dynamic programming Longest Common Subsequence algorithm to determine a sequence of add/remove changes to get from one file to another. This algorithm unfortunately has space complexity of O(n^2), so I had to split the difference calculations into individual blocks of size 1kb. (squared that still uses 1MB RAM to run!) I'll look into whether this causes any issues or can be better circumvented in future.
The work won't appear on GitHub until pools are stable.