Lets not forget the native "ZIP" function in windows, free and you can browse contents without extracting. That said as mentioned by the forum gods, 7Zip and Winrar (trial version will nag but doesnt expire) are the top dogs.
7-Zip is just awesome (from my several years experience of using it):
1. Supports variety of formats, including ZIP, RAR, and SFX archives 2. x32 & x64 OS support 3. Fast speed, uses multiple CPU threads 4. Simple, secure, and powerful
For ZIP and GZIP formats, 7-Zip provides a compression ratio that is 2-10 % better than the ratio provided by PKZip and WinZip