definitely tops the list.
A couple of years ago I used to use WinZip, but I got annoyed whenever I needed to click on 'Use Evaluation Version'. Later I was introduced to WinRAR and it is really good.
When I decompress a file I only need to right-click on the file and choose where I'd like to store the decompressed file. Then it does everything automatically!
Function-wise it can handle both .zip files and .rar files, and many other files, including .cab, .arj, .lzh, ,tar, .gz, etc. WinRAR's compression ratio is usually better than WinZip.
From then on I go with WinRAR to compress or merge files into one convenient .rar file!