Another issue which I have seen a couple of times in the past when using STSADM -o export or content deployment is a failure during the export phase with the following error message:
Failed to create package fileUnknown compression type in a cabinet folder
In all cases I have seen this problem was caused by insufficient disk space. Please monitor the disk space during the export/compression phase and ensure that sufficient disk space is available to perform this operation.
Thanks so much - this was exactly the problem!