hive.exec.compress.intermediate does not work?

[Steven Wong]

I have a query that runs as 2 MR jobs:

set hive.exec.compress.intermediate = true;
set hive.exec.compress.output = true;
set mapred.output.compression.codec = org.apache.hadoop.io.compress.GzipCodec;
set mapred.output.compression.type = BLOCK;
from (
    select c
    from t1
    blah blah
) x
insert overwrite table t2
partition (part = 0)
select *
blah blah;

The output of the 1st MR job is not compressed, even though I've set 
hive.exec.compress.intermediate = true.

Am I missing something? Using Hive 0.5.

Thanks.
Steven