File compression in it's simplest form,finds redundant data, catalogues it in a dictionary giving it a unique identifier, and whenever an instance of the phrase (using text as an example) is found, puts the identifyer in it's place, saving space.
Redundant data is data that is unecessarily inputted more than once. Text files can be readily compressed as words have alot of patterns to them, otherwise they would just be jumbles of letters.For example:
CODE
The cat ate my hat.
The cat ate my hat.
The cat ate my hat.
The cat ate my hat.
The cat ate my hat.
This could be compressed by:
CODE
Dictionary
The cat ate my hat.=1
Data
1
1
1
1
1
And anything that has been programmed to read the compressed file can uncompress it back to its original form.
Here is another way the data could have been compressed:
CODE
Dictionary
The=1
cat=2
ate=3
my=4
hat.=5
Data
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
1 2 3 4 5
So the megabyte file you downloaded can easily be over 1.8Gbs uncompressed. All they need to do is copy something thousands of times and rar it