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How File Compression Works
http://www.howstuffworks.com/file-compression.htm
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An article pitched to the layman on how compression works.
If you download many programs and files off the Internet, you've probably encountered ZIP files before. This compression system is a very handy invention, especially for Web users, because it lets you reduce the overall number of bits and bytes in a file so it can be transmitted faster over slower Internet connections, or take up less space on a disk. Once you download the file, your computer uses a program such as WinZip or Stuffit to expand the file back to its original size. If everything works correctly, the expanded file is identical to the original file before it was compressed.
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