Is it bad to Base62 encode a javascript file?

I just found Dean Edwards javascript packer here: http://dean.edwards.name/packer/

It has a couple of options,

1. Base62 encode
2. Shrink variables

To test it I took the latest version of jquery that is already minified to 56kb and ran it on that page above with shrink variables, the result is the same size file, 56kb.

I then ran the original file again with both Base62 encode and Shrink variables selected and the result was a 42kb file.

Now I don't know a lot about minifying and packing other then it makes the filesize smaller. But I am curious as to what Base62 encode is doing, is it bad to use it? I see it makes the file much smaller but does it create more work/load later on to decode it on the page?