By default, Virtualmin uses gzip compression on its backup files. However, this option can be used to select the more efficient (but CPU-intensive) bzip2 format instead. Alternately, you can select to create un-compressed tar format backups, which may be useful if writing to tape.

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`).