I tried to add gzip content encoding header to make server reply using that but the result was the same- uncompressed. Maybe I wasn't quite correct with header format since I'm not familiar in detail with this socket stuff or the LJ server doesn't support it at all? The latter case is rather odd since the reply for web interface is always in gzip (if accepted by browser).
I wanted to implement it for posting long entries especially on slow networks like GPRS.