Description
The sof2flash utility has an optional --compress option, which is documented in Table 3-3 of the Nios® II Flash user guide: http://www.altera.com/literature/ug/ug_nios2_flash_programmer.pdf
However, it can be observed that this option does not have any effect on size of the resultant .flash file.
Resolution
The --compress option is currently not functional in the sof2flash utility, and effectively the flash file produced is always of compressed format.
This issue shall be resolved in a future version of the sof2flash tool.