Should You "Maximize Compatibility" in Photoshop?
In a default installation of Photoshop, you'll be confronted with an ominous warning about maximizing compatibility when you save a new image as a PSD file. The dialog warns you that failure to do what it suggests may interfere with the use of your file in other applications or with other versions of Photoshop. Scary stuff. The question is though, should you heed its advice? Is safe better than potentially being sorry later?
The place to start when trying to answer that question is to understand what the "Maximize compatibility" option does and why it exists.
Photoshop PSD files are complex things. All you have to do is look at the Layers palette of an image with a few adjustment layers with layer masks and such to see that. Everything you have in the Layers palette has to get saved in the PSD file for that image. So long as you later re-open it in the same or newer version of Photoshop, all should be well. Adobe would make their customers more than a bit upset if they didn't retain a good degree of backward compatibility. But what if you wanted to open your new Photoshop CS4 file with Photoshop 7 for some reason? Now it's not so clear what would happen. Newer features such as smart objects likely won't be understood by older versions.
Because of the success of Photoshop, a number of imaging programs from third-party companies claim to be able to read PSD files too. Not all support every feature Adobe lets you use in Photoshop. Even if they did, Photoshop keeps introducing even newer features. Including popular programs such as Lightroom, Adobe themselves makes other software that have some degree of compatibility with the Photoshop PSD format. No one user uses every program of course. But what if a program you do use doesn't support a Photoshop feature you rely on? Now you can start to see why compatibility isn't something everyone can ignore.
In order to up the odds that you will still have something useable if you open a PSD image in some other program, Adobe provides their "maximize compatibility" option. There's no way they can make some third-party application support a feature it doesn't already, but what Photoshop can do is to make the files you save as easy to read as possible. It does this by adding an additional hidden layer that contains a flattened composite of all your real layers. That way, if the target program can't understand some new feature you may have used it can fall back to using the compatibility layer. That's likely not what you really wish it would do, but it's certainly better than nothing.
But even this modest safety net doesn't come free. Even though you can't directly see that extra compatibility layer in Photoshop's Layers palette, it's there and is guaranteed to make your PSD file bigger than it would have been without. An example PSD file with one background image layer and a couple of adjustment layers will in fact more than double in size with "maximize compatibility" checked. And rendering that flattened compatibility layer will slow down saving the file too. And since it's bigger, that file will take longer to re-open every time you work on it too. As I say, definitely not free.
My advice is to skip the "maximize compatibility" option unless you definitely need it. You can go into Edit >> Preferences >> File Handling and the "Maximize PSD and PSB File Compatibility" from the default of "Ask" to "Never" and Photoshop will stop asking you every time you save a new file. If you've had problems opening PSD files in another program you use and have found that PSD compatibility solves things you can instead select "Always" for this option and Photoshop will save with compatibility every time, still without needing to ask you. The default of "Ask" is likely your worst option. For most of us, either we need the compatibility or we don't. Asking just means you have to deal with the compatibility prompt every time.
By the way, there is one quirk about the "Ask" option you should be aware of if you do like being prompted each time. Once you've saved a PSD file, Photoshop won't keep asking every time you resave it. It will instead use the choice you made when you originally saved that file. You only get asked for new files, not for existing ones. If you want to change your mind later on you'll need to use "Save As" instead. Photoshop will then treat your file as new and ask you about compatibility again. Just leave the file name alone and your "new" file will get saved overtop of your old one but with your change to compatibility level.