Hi, just bought a copy of Kutt, it does exactly what we need, great work. Have noticed that it isn't compressing the images. They come out at the same size whether compress is selected in settings or not. Incidentally the file sizes are the same as when exported as png straight out of Photoshop. I am using Photoshop CS5.
Did you follow the instructions to enable the compress.command file (via Terminal)? Also, make sure your PSD files don't have spaces in their names, as pngquant (the compressor) is pretty sensitive with that.