> I'm curious, given the point about modem text compression, 
> why adding gzip
> to web servers/clients is done at all? Do you get effective 
> compression
> when transmitting IP packets (as opposed to, oh, zmodem)?

A modem has a limited amount of memory for storing the 
compression dictionary.  I assume that they work the same
way as PPP compression does:  if the dictionary fills up,
zap it and restart with an empty dictionary.  This is 
the same thing that happens when the two ends can't trust
that their dictionaries are in synch anymore (lost packet,
etc.).  With server/client compression, you can amortize
the dictionary over a lot more data.  A compressed archive
should consume less space than compressing each file 
separately (depending on the amount of common data in them).

Another fun bit in compressing protocols is to avoid
inflation of the stream when the payload is already 
compressed.

-david