How do i turn on the Keep Alive and HTTP Compression in Apache server 2.2( centos)

This requires the deflate module, so enable that. Under Ubuntu (which is what I'm using), the command for that is a2enmod deflate.

Then, use SetOutputFilter on your Proxy or Directory directive:

<ProxyMatch "^http://localhost:8080/($|app/)">
    Order allow,deny
    Allow from all
    SetOutputFilter Deflate
</ProxyMatch>

Or:

<Directory /var/www>
    Order allow,deny
    Allow from all
    SetOutputFilter Deflate
</Directory>

The benefit from having keep-alive on is that a client will be able to request more than one entity from your server without having to create another TCP connection (3-way handshake with its round-trips included). The problem with this is that if, say, you have a connection limit in apache set to 300, if there's 300 active connections all the others will have to wait until the first 300 clients are done and/or the timeout expires.

Disabling keep-alive will force the clients to create 1 connection per request. When the socket is properly closed on both ends, it goes into the TIME_WAIT status, as you've noticed. This happens to ensure that the port used in that connection does not receive data from a previous connection for a while before being available (see this, but there's much more out there). In my linux system, /proc/sys/net/ipv4/tcp_fin_timeout is set to 60 seconds. You can try reducing that, but don't go too far down. How far? It depends on how many connections per second you are getting. For 100-200req/s, don't bother changing the default.