Under what cirstances would windows NTFS file compression be unsuitable???

It is detrimental when any kind of disk performance is critical. For example, it is a bad idea to use NTFS compression on a file server because both the disk and the processor will be taxed any time the file is read or written. If the file is archived, and rarely accessed, it would be okay to use NTFS compression, but even in that case, I would tend to use ZIP or something to compress because it will usually compress better.