There was an old dos command "resize" or something like that, where you could resize the size of a file, without resizing it.... People used it to fake p2p programs.
Yea try zero filling a file to make it 700MB and it'd happily compress to a few MBs...but in real life, almost impossible.
They have compressed 2+gb into 50kb... Check around there are videos that are only 50kb exe demos, and it is supposed to show off that type of compression..