Apache 2 can compress text content before sending it. This gives a real speed boost, even for people with fast connection speeds. Compression is carried out by the Deflate Module.
The default settings for mod_deflate don't quite cut it with Internet Explorer. IE likes to tell web servers it's capable of doing things that it isn't.
Some additional directives need to be added to the configuration to make sure that only things IE can genuinely handle compressing are compressed.
There are also a lot of extra content types that can be compressed, which are listed in the default config. Likewise, there are plenty more files types that should never be compressed at all.