A zipped file is a file on your computer that has been compressed.
Zipped files are used to save space on computers and for smaller files when sending across the Internet. (The smaller the file, the faster it gets where it is going).
When a file is zipped all the information is still there but we have squeezed it together. The file must be unzipped before you can use it. When you unzipped it you are uncompressing it and putting back like originally. Some files when zipped or compressed will shrink a lot, spreadsheet files being a good example. Other files are already compressed and compressing or zipping them will save very little or no additional room. JPG (pictures) files are already compressed.
To zip a file (or folder) in Windows Vista or 7 you can right click on the file or folder and choose Send to and then choose Compressed (zipped) folder and Windows will create a zip file with an option for you to name it. To unzip a file in those Windows double click the zipped file or folder and you will then have an option to extract the file or folder which will unzip the file or folder.
There are third party utilities (programs) you can use to zip and unzip files. CoffeeCup.com has a good free product. WinZip.com has a good product. They used to have a free version but now all their products are sold.