PHP Zlib module allows you to transparently read and write gzip compressed files. Thus it is used for serving faster content to the end users by compressing the data stream.
Some applications like Pligg require zlib compression enabled by default in the PHP engine. For this purpose you can easily enable it by placing the following line in a local php.ini file:
zlib.output_compression = On
Please note that this php.ini file has to be copied to each folder requiring the above settings. This is necessary because settings in php.ini files do not apply recursively.