Oops, I said zipped when I meant arced instead. Arc version 5 is the same level of compression with the same tables etc., that Puff uses in his superarc and superunarc programs on the Atari platform. So I use arc500 on the PC to make arced files that unarc without any problems on the Atari all day long. You can still get it here with documentation too.
http://www.utexas.edu/ftp/microlib/dos/z100/compress/