Below is my review of few recent results in routing research. I select the papers to discuss based mostly on my current interests. I split the review into the following two parts: papers from theoretical computer science and from networking.
For a list of most important papers on compact routing, see Section 5 of http://arxiv.org/abs/cs.NI/0508021. Of course, there are much more results in this area. One can find them following the reference links. On the other hand, for a somewhat shorter version of the compact routing reference list, see 'Compact routing background reading' section at http://rr-fs.caida.org/.
Note that the compact routing framework is to construct algorithms achieving optimal balance between routing table size and stretch for a set of graphs, effectively assuming the 'global knowledge' of the graph topology. There is an alternative but closely related problem formulation and an associated set of recent results. The idea is to explain Milgram's letter-passing experiments in 1966 in which a number people (source nodes) were asked to pass letters (data packets) to addressees (destination nodes) whom the source nodes did not personally know---only destinations' geographical locations (places of living), occupations, and other metadata, were written on packets. The next hops were the current nodes' friends maximizing, in the current node's opinion, probability of letter's moving closer to the destination. The average path length was found to be around 6, which later gave rise to "Six degrees of separation". Milgram's experiments were the first demonstration that the social networks are small-world. The latter is now widely known fact, but there is another more interesting aspect to the story.
Indeed, what those experiments effectively showed was not only that paths were short, but that nodes could efficiently find them. 'Efficiently' means here that nodes did not have any global knowledge of the network topology: their routing tables were small and contained information only about nodes' neighbors---that is, their friends. At the same time, having succinct routing tables at the nodes, packets followed paths of small stretch.
The first popular attempt to model this effect was due to Kleinberg in 2000 http://www.cs.cornell.edu/home/kleinber/swn.ps. His model assumes that the real network topology consists of two parts: 1) a d-dimensional grid, and 2) long-range links: one link per node leading to a destination selected according to a specific distribution. The rationale behind the model is that the grid represents a relatively regular network part induced by people's place of living, occupation, etc., while long-range links represent random connections, e.g., people meeting on a plane. Note that all nodes in the model have fixed small routing tables of the size equal to the number of directly attached links (2d+1). Routing is greedy: a current node selects the next hop which is closest to the destination, but distances are calculated in the grid only, i.e., disregarding the long-range links. In other words, a given node knows only about its own long-range link and no other long-range links. Kleinberg shows that if the long-range link distribution is harmonic, then the expected number of hops to reach destination is polylogarithmic, otherwise it's polynomial.
Clearly, the key component of Kleinberg's model is the assumption about the d-dimensional grid, which is the simplest example of a network embedable in the d-dimensional Euclidian space, and compact routing on Euclidean metrics is easy http://www.cs.huji.ac.il/~ittaia/papers/AM-PODC04.pdf since there is a sense of direction: you are "here", the destination is "there", so just "go there". Keeping your position information takes a little memory and following a specified direction guarantees low stretch. Such familiar, to the networking community, concepts as geographical routing or P2P/overlay routing in carefully designed metric spaces are classic examples of attempts trying to utilize this routing easiness.
However, Kleinberg's assumption about the underlying grid, along
with the requirement that the long-range link distribution is
harmonic, is obviously too strong. No one in fact believes that the
actual acquaintance network topology looks like that. That's why I
think that the recent paper by Fraigniaud
http://www.lri.fr/~pierre/POSTSCRIPTS/tech_report_LRI_1397.ps makes
a huge progress in the area by significantly relaxing these
assumptions. Fraigniaud shows that the underlying graph can simply
be either of low treewidth
http://citeseer.ist.psu.edu/bodlaender93tourist.html or, almost
equivalently, of high clustering, and we know that all complex networks
observed in reality are strongly clustered.