This question appears also in https://cstheory.stackexchange.com/questions/17953/recursive-sequence-tree-problem-original-research-in-the-field-of-comp-sci. I was told that cross-posting in this particular situation could be approved, since the question can be viewed from many angles.
I am a researcher in the field of computer science. In my research I have the following problem, which I have been thinking for quite a while now.
I think the problem is best explained through an example, so first assume this kind of a tree structure:
1, 2, 3, 4, 5, 6, 7, 8
/ \
6, 8, 10, 12 -4, -4, -4, -4
/ \ / \
16, 20 -4, -4 -8, -8, 0, 0
/ \ / \ / \ / \
36 -4 -8 0 -16 0 0 0
The root of the tree is always some sequence $s = (s_0, ..., s_{N-1})$ where $N = 2^p$ for some $p \in \mathbb{N}, p>2$. Please note that I am looking for a general solution to this, not just for sequences of the form $1, 2, ..., 2^p$. As you can see, the tree is defined in a recursive manner: the left node is given by
$left(k)=root(k)+root(\frac{N}{2}+k), \quad 0 \leq k \leq \frac{N}{2}$
and the right node by
$right(k)=root(k)-root(\frac{N}{2}+k), \quad 0 \leq k \leq \frac{N}{2}$
So, for example, (6 = 1+5, 8 = 2+6, 10 = 3+7, 12 = 4+8) and (-4 = 1-5, -4 = 2-6, -4 = 3-7, -4 = 4-7) would give the second level of the tree.
I am only interested in the lowest level of the tree, i.e., the sequence (36, -4, -8, 0, -16, 0, 0, 0). If I compute the tree recursively, the computational complexity will be $O(N log N)$. That is a little slow for the purpose of the algorithm. Is it possible to calculate the last level in linear time?
If a linear-time algorithm is possible, and you find it, I will add you as an author to the paper the algorithm will appear in. The problem constitutes about 1/10 of the idea/content in the paper.
If a linear-time algorithm is not possible, I will probably need to reconsider other parts of the paper, and leave this out entirely. In such a case I can still acknowledge your efforts in the acknowledgements. (Or, if the solution is a contribution from many people, I could credit the whole math SE community.)

As others have pointed out, the transformation you're asking for is called the Hadamard transform (it essentially works like a discrete Fourier transform). While the "trivial" matrix multiplication takes $O(n^2)$ time, the structure of the matrix allows the computation to be done in $O(n\log n)$ time. However, it's less than like that this can be speeded up further, because that might imply a faster bound for the FFT, which is a major open problem.