Almost immediately litespeed started creating .lsz files. From the file names, I'm assuming that litespeed is compressing static files for performance reasons: compress once and then send that compressed file over and over.
I also assume this is because the "enable gzip" setting was set to yes. I wasn't expecting these files to get created and it cause a lot of problems immediately with rsync which propagates changes to several servers.
Right now I turned off "gzip compression". The php files are already gzipped dynamically, so I think my immediate problem is over.
I'm wondering ... can anybody quantify how much using .lsz files help over not having gzip compression on by default? The majority of my static files are graphics (jpg, gif, png) anyway.