Sorry for flooding the list, but i found an interesting note in Schowengerdt (2007), p. 400:

"The ISODATA algorithm (Ball and Hall, 1967) is a common modification of the K-means algorithm and includes merging of clusters if their separation is below a threshold, and splitting of a single cluster into two clusters if it becomes too large"

The algorithm implemented in the i.cluster module involves merging of classes (I_cluster_merge) though no splitting function seems to be implemented. Since Michael Shapiro stated that he might have used the K-means algorithm, I think we can be pretty shure that it is a modified version similar to the isodata algorithm, which is described as migrating means in Richards (2006).

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