Content Compression, as the name implies, compresses the data on your Blackberry to save space. Information is dynamically compressed/decompressed as you access it. Turning this off will gradually de-compress everything on your device, and you will see your available memory go down proportionally. While there is perhaps a small performance hit to having this option turned ON, I haven't found it to be particularly noticeable for most daily use.
Content Protection actually encrypts the data stored on your Blackberry, using ECC (Elliptic Curve) cryptography. I think the default setting is 168-bit or thereabouts, unless you're running against a BES, in which case an IT Policy might set it to a higher encryption strength.
This particular setting (Protection) will noticeably slow down your Blackberry, but it will also ensure that all of the data on the device is protected against hardware-based attacks (ie, disassembling the device and trying to read the data directly off the chips).
While it's a nice feeling, it's mainly relevant for DoD and law-enforcement level security, and probably not required by most users unless you're storing extremely confidential data (a good password and the normal BB password protection will protect your data well enough for most people, since ten incorrect passwords will wipe the device).
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