Editor: WinBZip2 is an small freeware utility for working with files produced by Bzip2 utility (usually it's files with .bz2 extension) and also create such files. Main features include the compressing, decompressing and testing the integrity of bzip2 files.
The bzip2 is an command line driven compression utility, Similar to gzip, but with more strong compression and more liberal license, also free from patented algorithms and currently popular almost as the gzip. Bzip2 is not archiving utility, i.e. its can't roll up several Files Together. It simply compress the specified file.
The quote from bzip2 manual: "bzip2 compresses files using the Burrows-Wheeler block-sorting text compression Algorithm, and Huffman coding. Compression is generally considerably better than that achieved by more conventional LZ77/LZ78-based compressors, and approaches the performance of the PPM family of statistical compressors".