Another way to think of a standard CD image (BIN, ISO, IMG, whatever) is just a tarball version of the file. If you create a Tape ARchive (TAR) containing an executable (EXE, COM, BAT, etc.), look at the executable in a text editor and do the same with the TAR file. Compare them and you'll find something rather interesting: they are pretty much the same. Because of this, all you really have is the data you need, in one convenient file. This means that there is no compression at all, hence the reason why TAR files are often found gzipped (<filename>.tar.gz) or bzip2'ed (<filename>.tar.bz2) when distributed to others. TAR files are tape archives anyway. The only use for them is to store the data on a tape drive and generally those are used for backing up data. BTW, RAR (Roshal ARchive) compresses most data a bit better than bzip2 (the best free compression technique). Nevertheless: Vive le bzip2! :)
tar / GnuPG = archive (usually has built-in support for gzip and bzip2)
gzip / bzip2 = compression for that archive
zip / rar / <many others> = archive + compression for that archive
That's not even getting into Macs. . .
Note: "standard" in this instance refers to "commonly accepted and recognized"
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