I have noticed that when I bring in rasters that were referenced in 9.3, the ovr files that are generated are big. Are these files necessary? I have also heard that the ovr file can be compressed. Is anyone familiar with this process?
The .ovr file is the new overview pyramid file that is created in ArcGIS 10. In prior version of ArcGIS the .rrd file was created for the pyramids. These file improve the raster display performance. You can use the Build Pyramid tool and define within the Pyramid Environment settings to set the compression.