X86 kernel build chain - how bzImage gets created
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I really should RTFMakefile, but I'm too tired after eating lots of turkey...
The choice of compression is not encoded in the filename.
http://www.kernel.org/doc/menuconfig/init-Kconfig.html#HAVE_...
It's worth noting that Linux can in fact use bzip2 today, and the resulting image is still typically called bzImage.
Either way "bz" stands for Big Zipped and is unrelated to bzip2.