“Failure decompressing data from a cabinet file” error while saving a site as template

After you increase the size of site template using the following command

Stsadm.exe -o setproperty -pn max-template-document-size -pv 524288000 

to set the maximum template size to 500 MB. You might get an error “Failure decompressing data from a cabinet file”. It is a known issue from microsoft
http://support.microsoft.com/kb/960969

Alternatively you can use import/export functionality of stsadm to serve your purpose

stsadm.exe -o export -url http://{yoursite} -includeusersecurity -nofilecompression -filename C:Mybackup

stsadm.exe -o import -url http://{yoursite} -includeusersecurity -nofilecompression -filename C:Mybackup

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