I don't know much about it, but I'm fairly sure that compressing the Xorg data stream with lossy compression is going to mess it up completely and would require

I don't know much about it, but I'm fairly sure that compressing the Xorg data stream with lossy compression is going to mess it up completely and would require a complete overhaul of the protocol to make that work. VNC is indeed the more standard unix thing (insofar as remote GUIs can be considered standard on unix-likes) that applies lossy compression to the pictures being sent over.