Some successful collision attacks have been carried out on sha1 with speculation that more are possible.
http://en.wikipedia.org/wiki/Cryptographic_hash_function#Cryptographic_hash_algorithms
No successful attacks have been shown on sha256, which makes it less likely that anybody will be able to engineer an asset hash collision in the future.
Tradeoff is more storage required for hashes, and more cpu to hash, though this is neglible compared to db operations and network access.
This is an extremely crude implemenation which almost works by accident. Nevertheless it does work.
It can be tested with the instructions at http://opensimulator.org/wiki/Feature_Proposals/Deduplicating_Asset_Service#Testing
It does not interact at all with the existing asset service or any data stored there.
This code is subject to change without notice and should not be used for anything other than gawking.
Justin Clark-Casey (justincc)