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Memory Issues with Compression Drivers
Compressed volumes only work with a compression driver, which must be loaded before the compressed disk can be used. This driver is responsible for "mounting" the compressed volumes and making them appear like regular disk volumes to the operating system and the applications that run on it. This normally occurs automatically when a system with compressed volumes loads. While these drivers generally work pretty well, there can be some issues with them. One is simply the fact that they can be rather large, and can exacerbate conventional memory problems.
Normally, DriveSpace 2 (or DoubleSpace) is used for older DOS versions, and DriveSpace 3 is used for Windows 9x. Under DOS, the DriveSpace 2 driver can be loaded into an upper memory block to reduce conventional memory usage, and this driver is not excessively large. Under Windows 9x, the DriveSpace 3 driver is large, but the system provides protected mode compression drivers that run in extended memory, so there isn't a problem with conventional memory being used by the driver.
The real problem occurs when Windows 9x drops down to MS-DOS mode; here the real-mode DriveSpace driver must be loaded to conventional memory, and it is quite large (over 100 kB). This problem is a valid one and cannot be eliminated. Good conventional memory management can reduce the problem, but cannot remove it completely; see here for tips on conventional memory management under Windows 95. Of course, many people today no longer run much of anything at all under straight DOS. For those that do use DOS, however, this is another reason to consider skipping disk compression, unless there is a pressing need for it.