Windows 7 can do this natively - without effort.
(As could Windows XP and Vista.)
As for other compression methods... 7-zip.org would be my recommendation.
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Locate the compressed folder that you want to extract files or folders from.
Do one of the following:
To extract a single file or folder, double-click the compressed folder to open it. Then, drag the file or folder from the compressed folder to a new location.
To extract the entire contents of the compressed folder, right-click the folder, click
Extract All, and then follow the instructions.