This addon is a plugin. You need to extract it to your /plugins folder to install it.
Captures the output buffer and gzips it.
At the very least it gives you a massive reduction in the amount of bandwidth you use as the HTML pages produced by Vanilla will be compressed.
As an addition though, you can edit default.php to include custom code to torture the buffer. In the readme and example enclosed I show how to make Vanilla run smoothly on multiple domains using str_replace to ensure that all URL's (even in comments) are re-written to match the domain that the site is being viewed on.
Props to grahack for his example of where to do this, and to WallPhone for pointing it out.