You mean compression? If so, yes, I think by default it compresses. The 5600 and the SL-Cxxx Zs all use a compressed JFFS2 partition for the ROM and internal storage. OZ on the 5500 also uses a compressed JFFS2 partition for internal storage.
In real terms I get about 2 times compression with my 5600 with a mixture of stuff saved in internal storage. Of course it depends on what you put in internal storage. Already compressed images like png and jpeg and compressed Java jar files cannot be compressed much more, but normally text files and apps and libraries compress very well.
