Wrote several posts on this topic, but none was 100% right. The following is a blockquote from webcheatsheet.com and looks much better researched then my previous tries:
Back up your MySQL Database with Compress
If your mysql database is very big, you might want to compress the output of mysqldump. Just use the mysql backup command below and pipe the output to gzip, then you will get the output as gzip file.
$ mysqldump -u [uname] -p[pass] [dbname] | gzip -9 > [backupfile.sql.gz]
If you want to extract the .gz file, use the command below:
$ gunzip [backupfile.sql.gz]Restoring your MySQL Database
Above we backup the Tutorials database into tut_backup.sql file. To re-create the Tutorials database you should follow two steps:
Create an appropriately named database on the target machine
Load the file using the mysql command:
$ mysql -u [uname] -p[pass] [db_to_restore] < [backupfile.sql]
Have a look how you can restore your tut_backup.sql file to the Tutorials database.
$ mysql -u root -p Tutorials < tut_backup.sql
To restore compressed backup files you can do the following:
gunzip < [backupfile.sql.gz] | mysql -u [uname] -p[pass] [dbname]
Rforge 