yeah - if you use RAR you get loads of options to further compress and stuff.
Or zip - if needs be too.
Can I also recommend "chainsaw" too. If you wanna leave smaller chunks for people on dial-up to dl, then you specify the file size (say, 8 meg or 4 meg or whatever) and it chops it up, with an ace chainsaw sound, then gives you however many chunks and a bat file to put it all back together again. Works well with rar'd or zipped files to reduce size and make dl for slower connections alot better.
Best bit - its totally free too!!
Dont have site to hand - google it!
DAB Studios