7-Zip is a free (open source) file compression utility.
It works with 7z a new archive format that provides high compression ratio, but also support ZIP, GZIP, TAR and BZIP2 (compressing / uncompressing) and RAR, CAB, ARJ, LZH and other less common data compression formats (extracting only).

7-Zip comes with a simple but effective File Manager that allow you to easily browse your local or network drives and select the files to add to a new compressed archive, uncompress files in a given directory, edit files with a text editor at your choice and perform all the most common operations on files and directories.

The program is also fully integrated with the Windows Explorer. By right-clicking a file or an archive you have access to all 7-Zip functions: view / test an archive, add file/s to an archive, uncompress files in a current or a given directory.

A command line version is also available and can be used to execute the program from a batch files.

7-Zip is free software: it can be freely downloaded (versions for Windows and Linux with source code are available) and used without limitations for personal use or even in a commercial organization.

However if you want to support the development of the program you can pay a registration fee from the site.