> I think if you turn on software compression this only applies 
> to the data "in-flight", i.e. it is compressed by the client but 
> decompressed by the server, regardless of the type of storage unit.
  ^^^^^^^^^^^^^^^^^^^^^^^^^^

What makes you say this?

> link.  Even on a WAN many WAN routers use compression to improve 
> throughput.

I never thought of this.  Cool.  Do you have an example that I can
study?

> There are now VTLs that compress the data going to disk; they always
have 
> a bit of a gamble as to how well they can mimic the way the real tape 
> compresses data; I'm told they just use very conservative 
> estimates, to make sure the disk image will fit on the tape.
             ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

This makes no sense to me.  No tape software ever, AFAIK, guarantees
that a medium is a certain length or holds a certain amount of data.
That's just not the way tape has ever worked.