Earlier I compared dealing with planet files compressed with bzip2 and gzip, and user Mungewell suggested trying out LZO (which I had originally remembered as LZMA, which is actually a different compressor with the opposite goals: maximize compression ratio, regardless of processing time). LZO turns out even better than gzip because it compresses and more importantly decompresses even faster, again at a loss in compression ratio but without leaving the order of magnitude set by gzip, bzip2, lzma. Recent planet sizes shape as follows:

raw 150 GB
lzop 14 GB
gzip 10.5 GB
bzip2 6.5 GB

...with lzop decompressing at least 2x as fast as gzip (which is already at least 15x faster than bzip2), so on a (2009) average hard-drive and average desktop CPU, processing a planet (reading off HD + decompressing) is fastest with LZO. Compression + writing to HD is also the fastest with LZO on my hardware, unfortunately I can't give exact numbers because I'm doing my processing on one of my university's machines now, which have better specs.

I suspect with LZO we're close the sweet spot and with one of those slower HDs you might be better off using gzip because the balance between CPU speed and HD access speed is moved in the direction where you want to save on IO. You definitely don't want to use raw planet because IO becomes the bottleneck even on fastest avilable hardware.