"All data in Ethereum will be stored in recursive length prefix encoding, which serializes arrays of strings of arbitrary length and dimension into strings."
Object serialisation is a common paradigm in programming languages, when complex data structures need to be stored or transmitted then reconstructed for processing.
Seems like it takes up a lot less space than a JSON string which is the most important thing IMO. As long as there are libraries for it so that third party software programs can read the blockchain.
Comments
You may have heard of XML or JSON, RLP (detailed here: http://wiki.ethereum.org/index.php/RLP) is another way.
I could only find: http://en.wikipedia.org/wiki/Radio_Link_Protocol
and Resource Location Protocol (http://tools.ietf.org/html/rfc887)