a gallon is a unit of volume. no matter how heavy it is, a gallon is a gallon. water weights like a little over 7 lbs per gallon, so a better question would be, what if you could fit 3500 lbs of water into 50 gallons. I get what you're saying though. The others are pretty much right. Water can compress, but so little as to be virtually nonexistant. Here is some information:
http://www.lsbu.ac.uk/water/anmlies.html#D1
You can increase the density of water slightly (compressing it) by changing the temperature. Water is at its densest at around 39 degrees fahrenheit.
Also putting a lot of pressure on water doesnt turn it into water vapor, in fact, putting a lot of pressure on water vapor will make it condense much faster at a given temperature.
If anyone uses CO2 injection then its a similar idea, the CO2 gas is at such high pressure it turns into a liquid, liquid CO2 boils at like -200 degress so when it goes into the pressure regulator, the pressure is dropped and the CO2 flash boils into a gas. This is why if you let CO2 out rapidly enough, the tank will become very cold, the liquid CO2 is absorbing heat from the air as it boils. In situations where pressurized CO2 is being used much faster than in aquariums, like big welding shops, the CO2 also is run through an expansion chamber which is sort of like a CO2 line through a small radiator that helps keep the line warmer because if you use it fast enough, you can get liquid CO2 in the line.
Some people think water can be pressurized because of pump water sprayers and water guns and stuff, but those just compress air behind the water so that when the chamber is unsealed, the air expands quickly and forces the water out.