Dial up- drops itself, slow speed!!

Then that is almost surely a phone line problem which would remain if you changed ISPs. It also could seriously impact a DSL connection (or even prevent you from running one in the first place) if not resolved.

It may be worth speaking with neighbours to see if they have similar problems - if so, then a group complaint to your local telco is likely to be more effective. However the fact that this happens at night only does suggest the problem is not the cabling but other environmental factors - this could be power fluctuations or a neighbour running something electrically "noisy" at that time. If there is a pattern (peaks/troughs at specific times) then taking a note of it may help in finding the root cause.

Unfortunately, that article uses confusing terms when describing compression. The V.90/.92 protocols include a compression option (V.42bis and V.44 respectively) - let's refer to this as "modem-level compression" (since WinModems will do such compression via software anyway, it can't really be called hardware compression). The "software compression" option for Dial-Up connections compresses data (using the Stac algorithm) before it is sent to the modem (DUN-level compression) while webpages (and other content) can be served up compressed by a server (content-level compression).

So content-level compression is likely to be the most efficient (being able to use more CPU-intensive algorithms), but will only come into play with servers using it. DUN-level compression and modem-level compression will affect all data (assuming that the ISP supports DUN-level at their end) but running both would mean unnecessary duplication and poorer performance so the best advice would be to experiment (I'd guess that v.44 > Stac > v.42bis) to see which offers the best performance and to just use that.