WP-Cache drastically speeds up WordPress, but doesn't play nice with gzip. Common fixes (like those found on Digg, such as ob_gzhandler and on-the-fly compression) actually HURT performance as cached pages are recompressed each time they are requested. Here's a modified version of WP-Cache that compresses cached pages only ONCE per page no matter how many times the page is requested, not once per request.
Diff files with vanilla WP-Cache v2.1.2 also included. Comments, suggestions, improvements very much welcome.