i have fedora core2 installed on my machine in addition to windows XP.when fedora is booted , initially a message 'Uncompressing linux' is shown.why this message is shown? does the linux os initially remain in some compressed state?please explain.thanx in advance.

It's my understanding that the linux kernel is compressed by the compiler when it is made, so that the RAM footprint used by the kernel initially is very small and thus helps with system stability.

You can make it even smaller by configuring and compling your own kernel from the source code. You can make it smaller by removing some kernel options and moving others to a module. You would only remove kernel options you are 100% sure that you will not be using on your machine. For other options the kernel will only let you move it to a module.

Hope this helps.

Edit: added a sentence to make it flow better.

The kernel is compressed much like a zip file. This allows it to be loaded faster and to a small RAM disc, i.e. a disc file image created within your memory. This done to assist in hardware detection during the boot process and this allows the correct drivers to be loaded. The kernel is then decompressed and used to initialise your system hardware.
A thing to note is that is also misspelt. The correct wording should be
"Decompressing linux kernel"
All the best and happy computing.