A Windows-based compressed file. ZIP is the industry standard for data compression technology, in part because it can hold directory structures in addition to files. On the Net, large graphics and programs are usually compressed as ZIP files and then made available for download. After you download a ZIP file, you need to use a decompression software program to "unzip" it. This may sound a bit complicated, but in fact, the process of zipping and unzipping files is quite easy. It especially comes in handy when you want to send digital photos to a family member.