Like Windows Me before it, Windows XP provides services for compressing your files so you don't have to go to the trouble of installing a third-party utility such as WinZip. In fact, Windows XP provides a couple of methods for this disk space saving task: one is the Compressed Folder option (which can also be found in Windows Me), and the other is NTFS compression which, as its name suggests, will only work on drives that utilise this file system. Both have their pros and cons.
You can create Compressed Folders under either FAT32 or NTFS file systems (they are simply .zip archives) and doing so is quite simple. If you have a number of files that you want to zip up, the first step is to select them. The next step is to right-click them and select Send-To-Compressed (zipped) Folder. This will create a new folder (featuring a zipper icon) in your current directory containing these files. If you want to add more files to the folder, you can simply drag them into it.
Unfortunately, this process won't move the old files, and makes copies instead. You can manually move files into compressed folders by holding the
Files inside a compressed folder can be viewed but not modified. If you need to modify any of your compressed files you will have to first decompress them, which can be done either by copying or moving them to a temporary location. Alternatively, you can just launch the file and work on it; when it comes time to save the file, you will have to select the Save As option to save it to a different location because you can't save directly into a compressed folder.
Tip: you can password-protect compressed folders by going to the File menu and selecting Add a Password...
To use this compression method your hard drive must already be utilising the NTFS file system. It is a far superior compression method for ease of use and convenience, and can be applied very easily to both individual files and folders. To compress a file or folder, right-click it and select Properties. From the General tab click the Advanced button and in the ensuing screen place a check in the box next to "Compress contents to save disk space". Click OK and then Apply.
At this point, if you are compressing a folder that has files and subfolders in it, you will be asked whether the changes should apply to all files and subfolders or just this folder - choose the former. Click OK twice to exit the Properties dialogue box.
When you compress files using this method, you can work on them as if they were regular files. Windows XP will compress and decompress them transparently so you are able to save files directly into NTFS compressed folders and don't need to create duplicate files to work on. If an uncompressed file is moved to an NTFS compressed folder, it will automatically become compressed too.
NTFS compressed folders can be distinguished from regular folders in Windows Explorer by their colour. All your regular folder names will be written in black text, but NTFS compressed folders will sport blue lettering.
Tip: to distinguish between regular and NTFS compressed folders, go to Tools-Folder Options, click on the View tab and make sure a tick mark is placed next to "Show encrypted or compressed NTFS files in color".