Bill Kearney has an excellent piece on using compression for your web sites:
As pages get larger and sites become popular the drain on available bandwidth can become a problem. The worst thing that can happen to a site is for it to become suddenly popular. Or an RSS feed gets pulled repetitively by dumb aggregator programs.
Eventually I’ll be migrating this blog to a server that supports mod_gzip or mod_deflate, and you know that I’ll take advantage of it. Definately check out the rest of his entry for links to tutorials and many other great points.