I came across this suggestion for a fix but I haven't tried this myself, so try it at your own risk.
1) Boot from the Vista DVD.
2) Click 'Repair my Computer'
3) At the prompt to select your OS installation, click the button that says 'Load Drivers'. This should bring up a explorer-style drive browser.
4) Then just right-click on the drive you tried to compress, and deselect 'Compress this Drive', which should still be ticked on. Hit apply, and apply to subfolders/files.