I recently wrote that LZMA has been used to pack more languages
onto the LiveCD. Here are some charts that show how LZMA
stacks up against someof the other popular compression algorithms.
(apologies for the poor image quality, open in another window 
for a clearer image)



These tests were run on a LiveCD archive using 7za(1). 
As you'll note, the compression ratio provided by LZMA is
about 35% better than gzip-9. However, LZMA is more
CPU intensive and as a result the compression and
decompression speed is slower than the alternatives.

So, for some use cases the cpu versus compression
tradeoff might make LZMA unsuitable but for the LiveCD
use case, it is reasonable provided we architect our
solution such that the decompression speed isn't a bottleneck
(Compression speed isn't a problem for the LiveCD architecture)