Source : Free On-Line Dictionary of Computing

gzip
     
         {GNU} compression utility.  Gzip reduces
        the size of the named files using {Lempel-Ziv} {LZ77
        compression}.  Whenever possible, each file is replaced by one
        with the {filename extension} ".gz".  Compressed files can be
        restored to their original form using gzip -d or gunzip or
        zcat.
     
        The Unix "{compress}" utility is patented (by two separate
        patents, in fact) and is thus shunned by the GNU Project since
        it is not {free software}.  They have therefore chosen gzip,
        which is free of any known {software patent}s and which tends
        to compress better anyway.  All compressed files in the {GNU}
        {anonymous FTP} area (gnu.org/pub/gnu) are in gzip
        format and their names end in ".gz" (as opposed to
        "compress"-compressed files, which end in ".Z").
     
        Gzip can uncompress "compress"-compressed files and "pack"
        files (which end in ".z").  The decompression algorithms are
        not patented, only compression is.
     
        The gzip program is available from any {GNU archive site} in
        {shar}, {tar}, or gzipped tar format (for those who already
        have a prior version of gzip and want faster data
        transmission).  It works on virtually every {Unix} system,
        {MS-DOS}, {OS/2} and {VMS}.