Both gzip and bzip2 command line tools are good compressing and archiving tools. For reference, bzip2 compresses a little smaller while gzip is the historical favorite.
Using tar to compress to gzip:
If you're making an archive, you can use gzip in conjunction with tar.
You do it this way: tar -cvzf archive.tar.gz /dir/to/be/archived
Uncompressing is simple: tar -xvzf archive.tar.gz
Using tar to compress to bzip2:
Compress: tar -cvjf archive.tar.bz2 /dir/to/be/archived
Uncompress: tar -xvjf archive.tar.bz2
If you want it even simpler you can use gzip. Just cd to the folder your file is in and type: gzip filename
Same thing with bzip2; cd to the folder your file is in and type in: bzip2 filename
If you have a big file that you want to compress use the -9 extension: bzip2 -9 filename
After it's done, the file should be called filename.bz2
To uncompress: bunzip2 filename.bz2
The archive should be in the same folder that your original file was in... that's all there is to it!