Applications in appstore aren't binary? Sorry if the title is confusing, I do not know how to describe it better. Perhaps an example will help you understand:

When I download a 1GB file (it's an example) the appstore I notice that the download is quite fast, or I do not down 1GB, the application gets 1GB only after installation.

So I was curious, the application before being installer is:


Compressed source and compiled in the installation


or


Pre-compiled and compressed


Would any of these? Or is it something else?
Apple stores their applications in what are essentially ZIP files, with a different extension. You could replace the ".ipa" on an iPhone app for example with ".zip" and extract its contents. So yes, they do use compression.