Compress and host large amounts of static HTML
Solution 1:
The mod_gunzip mentioned by Matt Simmons doesn't appear to exist for Apache 2.x. The replacement mentioned by the developer is to use Apache Module mod_ext_filter. I haven't tested, but it looks like it should be pretty easy to build a filter that decompresses files to be served.
The other thing you should consider is that most current browser accept content that has been gzip compressed. It may be possible for you to gzip your files and serve the gzip'd files without doing anything special. Here is a link with some details.
Solution 2:
Compressed Filesystem - Another solution is to deal with the compression a layer below the web server and files - at the filesystem level.
I've not done with myself, but you can try out something like fusecompress - so separate out your www
if you already haven't, and make it a compressed fs of some sort.
Obviously this will cost you in some performance, but if the processor is decent, then it might be ok.
Solution 3:
Have you looked at mod_gunzip? I'm too new to link to it, but a google search should point you in the right direction.