The GZIP zips up the content of your website and sent to you visitor. Your visitor browser then unzips and see the content. This process is transparent to your visitors. If you're on a fast connection (Cable, DSL), you probably won't see any difference at all in download times, unless you are viewing very large pages. However, people on dialup modems should see a lot of improvement.
gzip pros and cons:
- less bandwidth costs
- faster loading pages
- slightly more cpu usage.. not very noticeable with gzip set to 1.