You should be able to use the same tool you use to uncompress .zip and .rar files to make normal files into .zip or .rar format. (For example, I use and recommend 7-Zip at
http://www.7-zip.org .)
But those files will not be able to be read by the game and will not be playable.
For smaller but still usable and playable files, you might try playing with The Compresorizer:
http://forum.jfade.com/viewtopic.php?f=11&t=170&sid=eff7050df01f3aebff6228e72bfc4de7Other options include a separate external hard drive (they're often on sale for very reasonable prices therse days) to give you more storage space. If your computer is getting that full, you might want to explore moving some non-Sims content to CD or DVD to free up space as well.