7-Zip is an open-source file archiver, that offers a the highest compression ratio, using the new f 7z format, which delivers compression results that are usually 30-50% better than standard ZIP. We tested it with a server log file, which compressed with ZIP had a file size of 18 mb and using 7-Zip was reduced to 8 mb (results may vary, depending on file type).
In addition, 7Zip also supports 7z, ZIP, CAB, RAR, ARJ, GZIP, BZIP2, TAR, CPIO, RPM and DEB formats, so it can be used with all popular archive files as well. The program offers a basic file explorer interface and also integrates into the Windows right-click menu.
You can associate 7zip with any of the supported formats and also offers command-line support. Interface and additional features are fairly basic, but the compression ratio is outstanding.