Simply put, they're methods which make files smaller so that transmitting them across computers is faster.
Compression is like dehydrating food, it becomes smaller and packed closer together.
When water is added to dehydrated food, it expands back to its original state. In the same way, Decompression restores a file to its original state. When a file is Compressed, it cannot be used until it has been properly Decompressed. Inc. PKZip is the program that will compress a file, while its companion, PKUnzip, will decompress a file. Note that these are shareware products, and repeated individual use of either should result in registration of the product.