Modders Please Use the Compression Settings for the mods and mods itself.
For 7zip
1) Add Mod folder(best) or contents to archive from context menu or manager
2)Select “Ultra” or “Maximum” in Compression level
2)Select “LZMA” or “LZMA2” in Compression method
http://i49.tinypic.com/34hgrpf.jpg
3)Check the difference in “Compression Ratio”. Less means better.
http://i46.tinypic.com/2wmjjnn.png
or
http://i45.tinypic.com/e5r6lk.png
For Winrar
1) Add Mod folder(best) or contents to archive from context menu or manager
2)Select “Best” in Compression method and check the “Create Solid Archive”(you cannot update your archive but gives better compression) or read here
http://i45.tinypic.com/18204g.png
3)Goto “Advance” tab->”Compression”->Select “Text Compression” to Auto
4)Diffrence in file/folder size:
http://i46.tinypic.com/a17c7.png
NOTE: Compression ratio depends on CPU, above file size may vary
Source: http://forums.nexusmods.com/index.php?/topic/950846-best-compression-settings-for-winrar-7zip/