> > (1) Free -- download it at no cost.
> > (2) Open -- source code and format specifications available.
>
> the same can be said about zip and bzip2.
This is somewhat true. There are free implementations of the ZIP format, such as InfoZIP ( http://www.info-zip.org IIRC ), but I'm not sure what the patent situation is.
BZIP2 is a open-source royalty-free compression algorithm, so in that regard, yes, it has the same benefits as 7z.
> > (3) Decent -- 7z does pretty good compression, better than ZIP.
>
> uncompressed zip + bzip2 does better, and zip and bzip2 are far more common than 7z.
7z and ZIP are simply different ways of bundling files for compression by an algorithm such as BZIP2 or LZMA. As such, the container format shouldn't make a great deal of difference unless there's significant overheads. File ordering might play a part here too.