By default, Virtualmin uses `gzip` compression on its backup files. However, this option can be used to select the space efficient (but CPU-intensive) `bzip2` format instead. You can also use un-compressed `tar` format backups, which may be useful if you want a speedy backup, or if you are writing to tape. Or the `zip` format, which is easier to extract on other operating systems.

This option is only used when backing up virtual servers to a directory, with one file per domain. When backing up to a single file, the filename determines the compression format (like `domains.tar.gz` or `domains.tar`).