The Device themes use only a few small images for various components. Encoding the image data via base64 encoding has its pros and cons.
  
Pros
- images are loaded immediately with the style sheet
- reduces the total number of http request/responses

Cons
- images encoded are about 30% larger when encoded in base64, offset using gizip but still bigger
- managing the base64 encoded images is a bit tedious.

The initial tests show that style sheets even when compressed are about double the previous sized.
Fore example using the Iphone Theme:
Pre base64, iphone-min.css 28KB
Post base64, iphone-min.css 59 KB

The total images for the the iphone-min.css theme amount to 18KB. That said there are about 2.4KB of images that are duplicate in the base64 style sheet. However when I look at these numbers the cost of base64 doesn't seem to make it worth while.

The JSP component build script balloons to 38 sec from 9 seconds when compressing base64 encoded CSS files which is also an interesting fact. Most of our themes currently 7 images so we need to justify if the cost of the extra http requests is greater or less then a larger CSS file.