Microsoft thought ahead and, just in case you absolutely have to squeeze a few more extra disk space out of your hard drive, it integrated the "Compress drive to save disk space" option into its Windows operating system. The Windows client (and this is valid for a variety of versions of the platform, including Windows Vista and Windows XP) will permit users to compress files on the partitions that have been formatted as NTFS. The process is designed to give you a little extra elbow room and is generally harmless, except when applied to the Windows installation volume.
"On the drive property sheet for an NTFS volume, there is a checkbox called 'Compress drive to save disk space'. If you check that box, the shell marks the drive as 'compress all newly-created files' and also goes through and compresses all the existing files on the drive," revealed Raymond Chen, a developer on the Windows Shell team at Microsoft. However, Windows is configured by default not to touch certain files, namely the items responsible for its functioning under healthy parameters.
"Examples of exempted files are the files involved in booting the system (NTLDR, NTDETECT.COM, HIBERFIL.SYS) and files for which write requests must succeed (PAGEFILE.SYS). (If a file is compressed, then a write to previously-committed file data may fail if the new data does not compress as well as the old data and there is no more disk space.) These files are exempted on all drives, even if they're not your system drive," Chen added.
The items enumerated above are specific to Windows XP. In Windows Vista, you need not worry about compressing them. Why? Well, because Microsoft's latest operating system comes with an entirely revamped booting architecture and so, the files above have been discarded. In Vista, you will have to pay attention and steer right to the file in the Boot folder under Windows.
"On the other hand, if you right-click one of these exempted files and explicitly compress it, then the shell will compress it (or at least try to). For boot files, this will typically succeed since boot files are used only at boot; once the system is running, they aren't needed any more and therefore there aren't any open handles to the file with restrictive sharing modes. Of course, if you do this to your system drive, it won't boot any more. So don't do that," Chen added.Windows XP, Windows Vista, Compression, Tips and Tricks