Yes, it does. ARCserve has the ability of using software compression, but for remote servers the compression will only work if you have a client agent installed on it. It will not work when backing up over shares.
Remember that you will have to disable your hardware compression ( throuh the device manager, it can only be changed when having 'blank media' in the machine ). ARCserve will turn off software compression when it detects that compression is enabled on the hardware
hope I'm clear
regards