double space was nice unless you had anything that's been already compressed. I hated when it showed me 450MB of disk space (I had 160MB HDD), but then after installing Warcraft 2 it took 160 of my free space instead of 50MB (don't remember real figures, however war2 had already compressed files and it was shown in Norton Commander as "size: (let's say) 50MB, occupied: 160MB"
Remaining disk space was estimated using a compression ratio of 2.0 by default, but you could change the default, at least in Win9x. I don't know why it showed you 450MB on a 160MB HDD. You probably already changed it to 3.0 or higher.
I used a drivespace volume for a very very very long time, even when I had 80 GB HDDs, because it made it SO EASY to back up the entire windows installation - just copy the file.
I vaguely recall that the default was to use the current average compression for the default estimation. I always changed it to 1, which is much saner: instead of being surprised that you didn't have enough disk space to store something, you'd at most get surprised that you had more space left over than you expected after storing something. Even today, things like the transparent compression in btrfs use 1 as the compression ratio for the free space estimate (though its metadata usage can be a bit unpredictable).
DriveSpace was only ever available on FAT12 and FAT16 volumes. It seems like it'd be more annoying than anything for drives where FAT32 would be desirable.
Not really. I had (and still have and use today) a 2GB FAT16 partition with ~1 GB for DOS utilities, Win98 setup kit from the CD and various windows programs that didn't need to be installed. The remaining ~1 GB was the drivespace volume with 2 GB space inside (maximum) for Windows 98 and the rest of programs that needed to be installed to run. It was enough space for Office 97, Corel Draw 8, Adobe Acrobat 5, and many many small programs. Games are in a different partition.
