I wrote Archive::Zip, so I have a fair amount of experience with Compress::Zlib (though much of it is second-hand). I know of no one who has had problems with it after about version 1.06. Prior to that version, it would damage data sometimes when compressing.

Overall, I'd say it's quite stable. It's being used in the guts of ActiveState's PPM, for instance. Archive::Tar uses it for its file (de)compression, and Archive::Zip uses it for its member (de)compression. There are other interfaces to it, including IO::Zlib that lets you view a gzip stream as a file handle. This may be easier to use, depending on your application.