1. vi. To process, usually in a time-consuming or complicated way. Connotes an essentially trivial operation that is nonetheless painful to perform. The pain may be due to the triviality's being embedded in a loop from 1 to 1,000,000,000. "FORTRAN programs do mostly number-crunching."
2. vt. To reduce the size of a file by a complicated scheme that produces bit configurations completely unrelated to the original data, such as by a Huffman code. (The file ends up looking like a paper document would if somebody crunched the paper into a wad.) Since such compression usually takes more computations than simpler methods such as run-length encoding, the term is doubly appropriate. (This meaning is usually used in the construction 'file crunch(ing)' to distinguish it from number-crunching.)
3. n. The character '#'. Used at XEROX and CMU, among other places.
4. vt. To squeeze program source into a minimum-size representation that will still compile or execute. The term came into being specifically for a famous program on the BBC micro that crunched BASIC source in order to make it run more quickly (it was a wholly interpretive BASIC, so the number of characters mattered). Obfuscated C Contest entries are often crunched; see the first example under that entry.