Fundamental question on etherchannel hashing.

Question

Folks,
I had some very basic questions on the way hashing takes place on Cisco switches connected to each other over a port channel.
Considering that 2 links are used between the switch, namely port Gi 0/1 and Gi 0/2.
1) By default I understand that this could be a L2 etherchannel or L3 etherchannel, the default mode of hashing is still the Source and destination MAC id, am I correct?
2) So now if the source IP of 1.1.1.1 needs to reach to 1.1.1.2 how would the hashing calculation take place? Again I understand that this is on the basis of the last 3 bits from the IP address field. 001 and 010 come to 011 which is 3. So based on the number of ports it will select which interface to assign.
I still do not understand what has the below output got to do with the selection:
Core-01#sh interfaces port-channel 40 etherchannel
Age of the Port-channel   = 204d:07h:40m:10s
Logical slot/port   = 14/3          Number of ports = 2
GC                  = 0x00000000      HotStandBy port = null
Passive port list   = Te1/4 Te2/4
Port state          = Port-channel L3-Ag Ag-Inuse
Protocol            =    -
Port security       = Disabled
Fast-switchover     = disabled
Fast-switchover Dampening = disabled
Load share deferral = disabled
Ports in the Port-channel:
Index   Load      Port          EC state       No of bits
------+------+------------+------------------+-----------
 0      E4            Te1/4                 On   4
 1      1B            Te2/4                 On   4
Time since last port bundled:    204d:07h:19m:44s    Te2/4
Time since last port Un-bundled: 204d:07h:19m:54s    Te1/4
Core-01#
What does that load-value mean? and how is that calculated? and does that have a role to play in the selection of the port?
Thanks,
Nik

Answer 1

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So it looks like how to divide the bits is decided by the switch.
Ah, yea, reread my original post for answer to your second question.  ;)
An actual hashing algorithm can be rather complicated.  What they try to do is to "fairly" divide the input value across the number of hash buckets.  For example, if you have two Etherchannel links, they will try to hash the hash attribute such that 50% goes to one link and 50% to the other link.
For example, assuming you hash on source IP, how do you hash 192.168.1.1, .2, .3 and .4?  A very simple hash algorithm could just go "odd"/"even", but what if your IPs were .2, .4, .6 and .8?  A more complex algorithm would try to still hash these IPs equally across your two links.
Again, hashing algorithms can get complex, search the Internet on the subject, and you may better appreciate this.
Because of the possibility of such complexity, one vendor's hashing might be better than another vendor's, so they often will keep their actual algorithm secret.
No matter, though, how good a hashing algorithm might be, they all will hash the same attribute to the same bucket.  For example, if you're still using source IP, and only source IP, as your hash attribute, all traffic from the same host is going to use the same link.  This is why what attributes are used are important.  Choices vary per Cisco platform.  Normally, you want the hash attributes to differ between every different traffic flow.
Etherchannel does not analyze actual link loading.  If there are only two active flows, and both hash to the same link, that link might become saturated, while another link is completely idle.
Short term Etherchannel usage, unless you're dealing with lots of flows, is often not very balanced.  Longer term Etherchannel usage, should be almost balanced.  If not, most likely you're not using the optimal hash attributes for your traffic.