Everything has worked fine for me since doing this.
Sling, you definitely want to advise your server provider that there might be something squiffy about the zlibs.
I still haven't found a way for Internet Explorer to turn off gzip handling.
So you will want the server host to check the zlibs and fix them, if that's the problem.
Yeah, edit to add you definitely want your server host to make sure the zlibs are correct ones. You'll see your bandwidth usage go up greatly if we continue to browse without gzip enabled.