Hello, Naomi! Yes it is fully compatible. It may not be easily noticeable with most fieldtypes, but only fieldtypes that store its data in non-native EE tables require extra support for Publisher, everything else is naturally supported with no extra effort.

There is a hidden setting in the config.php file to turn off persistence for entries themselves. I’ve only tested it when used within something like a listing of news items where the client only wanted to show German content if it existed, and not show English as the fallback content. Its a hidden setting b/c it has not been thoroughly tested, but it does work: http://relief.medair.org/en/stories/