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optimizing shouldn't actually change the size of the database dump though

you can split the dump file if you like, also you can make smaller dumps by not dumping all tables at once. for example you could dump the posts table separately. although since that's the largest table it probably won't help too much.

Saving it with Gzip can help it cut down on size

Just wanted to give everyone who helped me out an update. I moved to a different host and it's like night and day.

Generated in 0.2347820 seconds (74.14% PHP / 25.86% MySQL)
SQL Queries: 20 / Global Parsing Time: 0.0470271 / Memory Usage: 2.25 MB
PHP version: 5.2.10 / Server Load: 0.08 / GZip Compression: Enabled

Thanks everyone.