Archives is the iOS version of the excellent ZIP (and more) archive utility for Mac OS X, and it works great.
I’ve been testing out the feasibility of running my entire illustration business from the iPad. On a recent out of town trip, I brought only the iPad to force myself to run into problems that needed to be solved. Browsing ZIP archives was one of them.
A potential client sent a ZIP file with some reference images, and I was at a loss as to how to open or view the contents.
GoodReader and Dropbox both failed me, but remembering the excellent OS X utility The Unarchiver had a companion iOS app, I gave it a try. And it works wonderfully. UPDATE: Turns out GoodReader does indeed unzip files, it was just a bit confusing.
The best part was not even needing to extract the actual ZIP archive, as the app has a browse feature that lets you just view the actual files in the archive. But you can easily extract files if need be.
Archives is highly recommended if you need this sort of functionality on the iPad or the iPhone.