cloop
The compressed loop device (cloop) is a module for the Linux kernel. It adds support for transparently decompressed, read-only block devices. It is not a compressed file system.
Cloop was originally written for the Levanta Bootable Business Card by Rusty Russell, but is now maintained by Klaus Knopper, the author of Knoppix. Cloop is mostly used as a convenient way to compress conventional file systems onto Live CDs.