If you enable "catalog compression" on a Windows master server, then it definitely uses "NTFS" file compression behind the scenes. Just drill into the /db/images folder and you'll see files coloured blue (if you have the required Windows explorer feature turned on).
We have a 160GB catalog, with compression of anything over 7 days old, and the whole catalog consumes 100GB on disk, and takes 3:30 to 3:45 to backup.
We found that we needed to defrag the volume hosting the catalog database to be able to maintain our catalog backup speeds. At it's worst, after not defragging for over a year, the catalog backup was taking over 6:00 hours. Also, using "catalog compression" definitely slows the catalog backups down too.
N.B. Be very careful when adjusting the number of "days" in the "catalog compression" window. A jump too far either way will cause many days of data to be either compressed or un-compressed - you risk thrashing and possibly delaying or even corrupting your catalog if you change the "days" value by too large an increment. If you have never used this feature before, I really recommend that you read the required sections of the Sys Admin Guides.
