ssh server waits for an ACK from the client

Hi.

I have noticed that a large amount of data moving from an ssh server
to the client pauses occasionally pending a packet from the client.
Very simply, I ssh into a remote server and 'cat' a large file (~6
MB). If I grab the data on the server-client path and prevent it from
reaching the client, the server stops sending after a while. If I pass
the grabbed data on to the client, it reads it and sends a small
packet back to the server, which then starts sending again.

This is not at the TCP level so I know it isn't a TCP ACK issue. I
very much doubt it's an issue with 'cat', either. Does ssh wait for an
application-level ACK every few thousand bytes before continuing to
send data?

I am using OpenSSH_4.0p1, OpenSSL 0.9.7g 11 Apr 2005 on cygwin,
Windows XP sp2. I have had the same results using the same client and
an ssh server on Linux with OpenSSH_3.8p1, SSH protocols 1.5/2.0,
OpenSSL 0.9.7d 17 Mar 2004

Thanks

Greg