Well, instead of doing this in the Linux kernel, you could also do it in the boot loader. U-Boot supports both gzip and bzip2 decom- pression.
Just to keep us busy, there are people that chose options other than u-boot :-) For embedded systems that are really sensitive to boot time and amount of flash used, they may only have minimal instructions for processor initialization and then jump to the compressed kernel image. I'm not going to discuss boot roms any further (yes, I use u-boot every chance I get).
-- Dan
