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Slack Reduction Using Volume Compression
Slack is the space wasted due to unused storage at the end of the last cluster used to store the data in each file. When a great number of files are stored on a disk with a large cluster size, a lot of the disk is wasted due to this overhead. To eliminate this inefficiency, many people use partitioning, for example, to reduce the cluster size of each partition. Another common way that slack is reduced is through the use of FAT32, which allows much smaller clusters on large partitions.
Compression can also be used to reduce slack, in a couple of different ways. The easiest and simplest way to do this is to simply archive infrequently used files. If you have 1,000 files sitting around that you think you may need at some point, but don't access regularly, stick them into a ZIP file. This will automatically reduce the slack taken up by these files by a factor of over 99%, because slack is proportional to the number of files. One file takes up much less slack than 1,000. Of course, this is not a very practical solution for files you use frequently, though tools like ZipMagic can make infrequent access more convenient.
Volume compression can also be helpful for reducing slack in older systems that cannot use FAT32. Volume compression tools like DriveSpace 3 can in fact save space even when set not to compress any files at all, simply due to slack space reduction. Internally, DriveSpace 3 compressed drives allocate files on a sector-by-sector basis. This means that they have an effective cluster size of 512 bytes, because they use an internal format that lets them store more than one file in what would be a cluster on a regular drive.
Some people set up DriveSpace 3 volumes just to get this advantage. It can be configured so that no files are actually compressed (for performance reasons, to save on the overhead of decompression) but you still get the slack reduction because of the slack reduction feature. You still have some of the risks associated with using a compressed volume however, and also the loss of some memory for the compressed volume driver, which has to operate even if you set it to no compression (slack reduction only).