Compact view was removed in Nautilus 3.6 (see bug 676842), but I think it should be restored because it has some major advantages over icon/list view.

I don't agree with the arguments given in bug 676842 for removing this feature:
1) The compact mode does horrible things like horizontal scrolling.
2) It isn't significantly different from icon mode with labels on the side.

My thoughts on those arguments:
1) It is not clear to me why horizontal scrolling is horrible. I've been using compact mode with horizontal scrolling for years (with both mouse and touchpad) and never had a problem with it.
2) This suggests it can be replaced by the icon view with labels on the right, but I don't see an option for that in Nautilus 3.6.3. Moreover, screenshots posted by Stéphane and amr in bug 676842 clearly show that there is a significant difference in the way files are shown. Compact view makes it much easier to scan through long lists of files and directories (in part thanks to horizontal scrolling).