As far as I can tell, it is no longer customizable -I went to my CP, and there's no option there.
As to how it's saving bandwidth:
Up until recently, I had my view set at 20 posts per page, then I changed it to 40 per page.
I found that I had far fewer clicks, resulting in less calls to the database (which, granted, is CPU cycles and Hard drive access, not bandwidth, but....)
Is there any evidence that reducing the posts per page results in less bandwidth? Is bandwidth the only consideration? From the slowdowns, it seems like there's some hard drive or database or CPU issues, as well?