The official documentation for mod_deflate works, and gives me nice results so far on my serveR. Are there any changes anyone suggests for use on a production machine?
http://httpd.apache.org/docs/2.2/mod/mod_deflate.html#recommended
<Location />
# Insert filter
SetOutputFilter DEFLATE
# Netscape 4.x has some problems...
BrowserMatch ^Mozilla/4 gzip-only-text/html
# Netscape 4.06-4.08 have some more problems
BrowserMatch ^Mozilla/4\.0[678] no-gzip
# MSIE masquerades as Netscape, but it is fine
BrowserMatch \bMSIE !no-gzip !gzip-only-text/html
# Don't compress images
SetEnvIfNoCase Request_URI \
\.(?:gif|jpe?g|png)$ no-gzip dont-vary
# Make sure proxies don't deliver the wrong content
Header append Vary User-Agent env=!dont-vary
</Location>
The tradeoff you have to make is time versus size. If you spend time changing the compression level, it might take a few milliseconds more to serve the page for a minimal benefit in making the compressed page smaller.
The defaults are fairly well balanced, handle 99% of the browsers correctly and are well thought out.