Some Davey said it's set via:
ob_start( array('ob_gzhandler', mode) );
But changing the mode from/to 1-9 doesn't affect the output
Looks like it's used to set gzip/deflate mode
If you're looking for compression level, simply use:
ini_set('zlib.output_compression_level', 6);
Default value is -1 (level 6)