Alpha ZIP
Alpha ZIP is a plug-in for Windows Explorer that enables you to work with Zip files, Rar files, Cab files and other types of file archive in exactly the same way as ordinary folders. Click on a Zip file or a Rar file in Windows Explorer with Alpha ZIP, and it opens like a folder to show the contents. If there are subfolders inside the archive, they can be explored just like normal subfolders. You can drag and drop files to and from a Zip folder, and even edit files inside a Zip.

If you're using Windows XP, you may be thinking: "But Windows Explorer already does most of this!" Well, Windows XP does have some basic support just for Zip-compressed folders. But Alpha ZIP goes much further than this, turning Windows Explorer into a real Zip archive manager with the kind of features found only in dedicated applications like BitZipper or WinZip. And it supports a lot of other compressed folder types besides Zip.
Alpha ZIP is faster and more robust than the Zip support provided in Windows XP. Using Windows XP, adding a file to a Zip compressed folder can often cause a "blue screen of death" Windows crash. Alpha ZIP allows you to rename files in a Zip archive, or move them to another folder within the archive.
Alpha ZIP even lets you edit a file in a Zip archive! It achieves this clever trick by unzipping the file to a temporary location, then detecting when changes have been made and updating the archive with the changed version.
Alpha ZIP gives you handy extra Explorer context menu items to make working with Zip files faster and easier, such as the ability to compress and email a file or folder in one go. Alpha ZIP also allows you to create self-extracting archives (useful if you want to send some files to someone you aren't sure has a Zip program.)
Alpha ZIP supports many different compressed archive types that you may come across besides Zip files, such as .arc, .arj, .cab, .lha, .lhz, .rar, .tar.gz, .tgz and .zoo. If you need to work with Zip files and other types of archive, Alpha ZIP is the easiest way to do it.
Why not download the trial version and see for yourself?