I want to implement an automated backup system for my site's SQL Server 2005 DB that will backup nightly to Amazon's S3 service. But since S3 charges both for space and bandwidth used, I would like to minimize the size of the files that I transfer in. What is the best way to achieve this?
I should clarify that I'm not really talking so much about compression, which is pretty straightforward, but concerning backup strategies like whether to do differential backups all the time, whether I need to copy transaction logs, etc.