Ed,

See my answers inline:

"I don't think your question is clear. What do you mean "on oracle backed by
storage luns?""

We'll be using luns from a storage array vs ZFS controller disks.  The luns are 
mapped the db server and from there initialize under ZFS.

" Do you mean "on oracle hardware?" " 
On Sun/Oracle x86 hardware 

"Do you mean you plan to run oracle database on the server, with ZFS under
the database? "

Yes
Generally speaking, you can enable compression on any zfs filesystem, and
the cpu overhead is not very big, and the compression level is not very
strong by default. However, if the data you have is generally
uncompressible, any overhead is a waste.
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