I have always by default used the ZIP file format whenever I have needed to compress files. Never gave it a second thought as I have been using ZIP files for archiving since the days of PKZip/UnZip (at least 17 years).
Sure enough it turns out 7z leads to higher compression ratios. (For example on a LAS file - a LiDAR point cloud containing binary data - the original file was about 73 Mb. The ZIP format lead to a compressed size of 40mb and the 7Z format lead to a file size of 29mb). It does seem to run slower than when I zipped the file, but to me compression ratios are more important that processing speed.
His recommendation for software to use - 7 Zip and iZarc. I like 7 Zip, as it has a good set of context menu options - which is important to me (I hardly use the full UI to perform my compression and decompression work). He likes iZarc as it has a release that is portable and can be run off a USB drive.
Whatever you choose - bottom line - if you have been using ZIP by default, then its time you took a look at the newer compression algorithms. http://en.wikipedia.org/wiki/Comparison_of_file_archivers
Thanks to Josh on setting me straight on the path to reduced bits.