Pros is obviously you can fit more data on your backup device.
Cons is you may have trouble restoring the data, and certain types of data (ie already highly compressed data) will actually increase in size when being compressed.
Symantec recomends not to use compression when backing up database files.
For example, I have two backup servers in two different sites and have a ~60GB database file that I backup. When using compression we can backup the database and restore it fine at its own site, however if we try to restore it at the other site it fails. The only way for it not to fail (apart from not using compression) is to duplicate the data to another media set uncompressed and then restore from that.
I would use compression (try hardware, then software as its faster) except on large database files or other files that will not compress well (ie, video media) as this can in fact make the backup larger in size. I would definately use compression for word/excel/generall office docs
I would also test that you can restore the data, and try it on another server as well if you can.