It looks like one file per direction, and this is a point to point connection. It looks like each side just reads to the end of the file and then tries to read more to see if any new data is available.
Hi Andrew, there's just one writer (which can tunnel multiple TCP connections).
Arbitration was indeed one of the trickiest bits. Originally I pre-reallocated the full file size (10 MB). Then used an integer at the beginning of the file to signal to the other side that a block was ready. The other side repeatedly read that int, and read the corresponding part of the file. But writing twice (once for the data, once for the int) had a significant performance impact.
In the end, what worked best was not pre-allocating the file. Rather letting the file grow whenever the writer writes to it. The reader knows when data is available by doing a PeekChar() in a tight loop. It's surprisingly fast, and accurately reflects the state of the file.
Also how does either side know when the file has been updated?