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The repositories created by PDE Build should be compressed (See the -compress option of the generator). Note though that we don't want to change the compression mode of the repositories we exporting into if they were already existing before.
*** Bug 233127 has been marked as a duplicate of this bug. ***
Consider for 3.4.1
PDE/Build now supports compress with the property "p2.compress". UI should refer to IBuildPropertiesContents.PROPERTY_P2_COMPRESS. UI needs to set this property to "true" to have export produce compressed repos. Marking this as fixed. See Bug 242627 for turning this on for export.