We use the QuickLZ compression library.  We compress the data on a block level and not on a whole file so the compressed VM Backup backups can only be decompressed using VM Backup itself.

As for the compression rate, it depends on the data contained inside the Virtual Disks.  If it’s a static Virtual Disk with most of it being empty then the compression rate is huge.  Unfortunately we cannot give accurate compression rates as it all depends on what type of data is being compressed in the backup.