How does winzip work? Actually, how do you compress a file?

Here's some help in understanding the process;

http://computer.howstuffworks.com/file-compression.htm

 

I think you'll find word documents compress very nicely. I prefer winrar over winzip for my compression needs. You can easily experiment with each to see what you like best.

 

zip is an ok compression scheme. gz is better and bz2 is even better.

 

And lzma is even better than bz2.

Almost all of the compression algorithms in use are "good enough". Zip and gzip files are small, and just about every decompression utility can work with them, so they're very portable. In a situation where you have to give the files to someone else, it's more useful to have a portable file format than a higher compression ratio.

Of course if you're just compressing your own archives, just use the algorithm with the highest compression.