I noticed that the system VM template is stored in S3 as a .bz2.  E.g. as a 
.vhd.bz2 when using a Hyper-V hypervisor.

Naturally, you can't run a bz2.  Nor can you make a thin copy of it, say if 
it's a downloaded as a TEMPLATE to a primary storage pool.

Should it be uncompressed before it goes into S3, when it is copied from S3 to 
primary storage, or when a volume is created from the TEMPLATE?

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