Drive Compression Inquiry

[PeoriaPokerPro]

Hi everybody!

I have a 250 gig external hard drive. I use it for backing up important documents, which I know takes up very little storage. However, I also store large files, such as audio and video and games, and I am starting to run low on storage. I really would like to avoid buying another drive right away. My question is, if I use drive compression, how many more gigs will I be able to download? Also, are there any bad side effects? Would this have any effect on my internal drive, or slow down my computer? I would very much appreciate advice weighing the benefits against the negatives of compressing an external drive, and how much extra space I would have.

Thank you any and all.

(Dell Dimension 4550 ... windows XP ... pentium 4 / 2.53 ghz ... processor speed 2.46 ghz ... 256 RAM ... operating system version 5.1.2600 ... and the external hard drive is an IO Magic 250 gigabyte)