I am using Uploadify on one of my client\'s web sites to allow them to upload a large amount of pictures at once to their photo gallery.
I am seeing issues lately.
You won't be able to compress JPG images much using zip or similar algorithms - they are already close to optimum in themselves. You'd have to resize them on client side. For that, see e.g.
Image resize before upload
jquery + flash: looking for plugin that resize images before upload
Image resizing client-side with javascript before upload to the server
Image resize is not the same as image compression.
When you compress you get an image with same dimensions at lower quality.
When you resize you are getting same quality at different dimensions.
Anyway, I developed a javascript library called JIC to solve that problem. It allows you to compress jpg and png on the client side 100% with javascript and no external libraries required!
You can try the demo here : http://makeitsolutions.com/labs/jic and get the sources here : https://github.com/brunobar79/J-I-C
Hope you like it.