Just tested zlib_compression on Dolphin 7 RC2 and I have not noticed any ill effects so far.
My Index page was reduced 88% - from 123142 bytes to 14903 bytes (Thats 123Kb down to 15Kb)
Naturally it won't help photo/sound/video compression, but all the template and script info will be greatly reduced so it should assist in bandwidth costs. Especially traffic generated by bots scrapping your website for content :)
