Microsoft Knowledge Base artice Q251186 describes file and folder compression performance. I am quoting the article content so the search engine can respond to queries:
"NTFS compression can cause performance degradation because a compressed NTFS file is decompressed, copied, and then recompressed as a new file, even when the file is copied in the same computer. On network transfers, files are decompressed, which affects bandwidth and speed.
Compression runs more efficiently under Windows 2000 Professional than Windows 2000 Server. Heavily loaded servers with considerable write traffic are poor candidates for data compression, while read-only, read-mostly, or lightly loaded servers might not experience significant performance degradation.
Programs that use transaction logging and constantly write to a database or log should not store their files on a compressed volume. If a program is modifying data through mapped sections in a compressed file, it can produce "dirty" pages faster than the mapped writer can write them. Programs such as Microsoft Message Queue (MSMQ) do not work with NTFS compression because of this issue
Microsoft does not recommend that user home folders and roaming profiles be placed on a volume that is using NTFS compression because of the large number of reads and writes performed.
For additional information, see the "File and Folder Compression" and "Compression Performance" sections in the Microsoft Windows 2000
Resource Kit."
