This report delineates the theory and terminology of data compression. It surveys four data compression methods--null suppression, pattern substitution, statistical encoding, and telemetry compression--and relates them to a standard statistical coding problem, i.e., the noiseless coding problem. The well defined solution to that problem can serve as a standard on which to base the effectiveness of data compression methods. The simple measure described for calculating the effectiveness of a data compression method is based on the characterization of the solution to the noiseless coding problem. Finally, guidelines are stated concerning the relevance of data compression to data processing applications. (Author/DAG)