Smart quantization of SVG paths sounds like a neat problem. Is there no existing tool for it already? Along the lines of pngcrush or similar.

This may be too-stupid-to-work but what immediately comes to my mind is normalizing all coordinates into an [0,1]x[0,1] interval and then finding an optimal N so that the maximum rounding error for quantizing all coordinates to the nearest K/N (where K is a non-negative integer up to N) is minimal (for some definition of "optimal", since you have two criteria now - resulting path string length AND maximum rounding error achieved for a given N). Then all your coordinate components should be integers in the range of [0,N].