What is a ZIP file
ZIP is an archive file format utilized for the lossless compression of one or more pieces of data. It was created in 1989 and implemented by PKWARE, Inc’s PKZIP utility to replace ARC compression. Microsoft has a built in program with ZIP support, as do other operating systems. ZIP format supports various compression methods as well as archiving files together without compressing them. ZIP files are easy to send when applications will not allow multiple files (or an entire folder) to be sent at once, and they take up less space to allow more items stored on a single machine.
Each file in a ZIP compressed folder is compressed individually, not as the whole archive. This allows the program, ideally, to compress each element in the most appropriate way possible instead of using one method for all of the files involved. This limits the compression potential, unfortunately. The DEFLATE method is most commonly used for all 10 different types of files ZIP files can contain. Other methods include: BZip, LZMA, PPMd, Jpeg, and Wavpack. When compressing files by zipping, the user can select the “Best method” option before compressing. ZIP files are usually seen as some sort of document icon bearing a prominent zipper design to signal the difference in the normal file and the zipped version.
Here's a small, but not exhaustive list of programs that can open ZIP documents: