Directory used for this benchmark: test_tarball 189M in size. The directory contains /var/log files.
OS: Ubuntu 12.04LTS
CPU: Intel(R) Core(TM) i5-2410M CPU @ 2.30GHz
RAM: 2 x 4096MB DDR3 1333MHz
HDD: Hitachi HTS72323
.gz
tar cvzf tarball.tar.gz test_tarball/
Size of tar.gz tarball: 22M
Compression time: 0m3.926s
.bz2
tar cvjf tarball.tar.bz2 test_tarball/
Size of tar.bz2 tarball: 19M
Compression time: 0m38.924s
.xz
tar cvJf tarball.tar.xz test_tarball/
Size of tar.xz tarball: 18M
Compression time: 0m57.988s
It seems that it does not make sense for use .xz tarball for small size files.