Alternative to CSV?

I'm sure you've already considered this, but I'm a fan of tab-delimited files (\t between fields, newline at the end of each row)

I would say that since CSV is the standard, and since everyone under the sun can parse it, use it.

If I were in your situation, I would take the bandwidth hit and use GZIP+XML, just because it's so darn easy to use.

And, on that note, you could always require that your users support GZIP and just send it as XML/JSON, since that should do a pretty good job of removing the redundancy accross the wire.