Will enabling compression when formatting USB drive slow it's writing?

compression, almost by definition trades speed for space.
I would expect a noticeable change when doing it with usb devices.

In part it depends on the file types.
Media files and many image formats are pretty much compressed already.
Especially video streams they're about as compressed as they can get without loss of quality as they are.
Text files, random data files. These get a lot more out of compression.
Stuff with 'space' in it to compress.

There are exceptions, bitmap image files for instance as you may already know are bloated and do take to compression pretty well. Most the current jpeg standards in use are about a 10 to 1 ratio I think to bitmap for data compression.

Anyhow the honest answer is it depends.

Yes. Just uncheck the "Compress this drive..." box and click "Apply", the files will then be uncompressed. This does assume that the drive isn't so full that there isn't enough room to fit all the files if they are no longer compressed.

Another way to do it would be to copy the files to another drive, they will be copied uncompressed unless you have that drive compressed as well.

With storage space as inexpensive as it is now, I personally wouldn't bother with compression.

Both reading AND writing performance can be effected since the files need to be compressed during writes and uncompressed during reads.

I don't know the particulars of how Win 7 compresses things but back in the DOS days, when disk space was very expensive, MS had something called DriveSpace (also called DoubleSpace) that allowed you to compress your files and save disk space. There were lots of problems with it and many people lost ALL of their data because of it.