Upon a successful login, the first operation that the client performs is a Refresh. During a refresh, the status bar at the bottom of the GUI client will read "Retrieving Repository Structure." During the refresh, the client requests that the server send it all of the changes between the last version of the repository that the client has seen and the latest version that the server has. This "tree delta" looks something like this:
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Delete file.cs version 1 Add file.cs version 2
One case where this setting can cause problems is where the server does not have enough memory to compress the delta. During the compression, the memory usage of the server will go up dramatically. If the usage goes past a certain limit, Windows will kill the server process, which is the aspnet_wp.exe process. Only some users will see this problem because only some clients will be requesting tree deltas that are larger than the TreeDeltaCompresionThreshold setting.
You may set TreeDeltaCompresionThreshold to 0 to disable compression of tree deltas.