I believe this is correct. I worked at T J Watson during this famous match and if I recall the consensus in the halls was that these CMU grads had some interesting hardware hacks but the program was essentially the classic heuristic search with evaluation function. I think computers also have been used to work out some end game solutions

I agree with most of this, but one should not overestimate the impact of general hardware progress since 1997. Each extra ply takes an order of magnitude more computation, and the state of the art in endgame tablebases has "only" progressed from 5 pieces (e.g. KBB vs. KN) to six pieces.

I do not think this is the case. If you follow chess and the matches where a top GM plays a computer you will find most of the time it is a draw. There was an article on chessbase many years ago that showed that chess program rating had stopped growing as fast and they were leveling out just as player ratings level out. http://www.chessbase.com/newsdetail.asp?newsid=1292

This is definitely the case. Check out Rybka - it has been rated 3200+. No human being comes close.

After further reflection I'm not sure my belief is wrong.

The match between GM Roman Dzindzichashvili and Rybka has finished with a somewhat surprising (at least to me) score of 4-4.

http://www.chessville.com/Wall/DzindziRybka.htm

From the article:

"the odds were changed to - Roman gets White every game, the computer offers up a different pawn each game."

So the computer gave Dzindzi an enormous handicap.

I failed to make my point...sorry. A human rated 3200 would win more than 4 games even given the restrictions against a GM rated ~2550. Ratings are not as as transferrable as one would think, especially when a computer is involved.

Time away breeds ignorance...thanks for the reference

Perhaps we are coming closer to optimal play?