With zip support built into OS X a third-party compression utility has to bring something special to the table, and BetterZip does. Basically it allows you to open and inspect archives without expanding the whole thing first. This can be useful if you only want a few of the files that are compressed within an archive. It also does compression naturally, including encryption, splitting large archives, and stripping out Mac specific hidden files to make archives more cross-platform..
BetterZip supports a bunch of formats which should cover just about anything you'll run into on the net: ZIP, SIT, TAR, GZip, BZip2, RAR, 7-Zip, CPIO, ARJ, LZH/LHA, JAR, WAR, CAB, ISO, CHM, RPM, DEB, NSIS, BIN, HQX, DD. Finally, the developer has also put together a great Quick Look plugin that supports most of the same formats.
BetterZip is normally $19.95 and a demo is available but as it happens it's on sale at MacUpdate Promo until Monday evening for half-off ($9.95)