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In this video tutorial, the presenter demonstrates how to compress file sizes using WinRAR. Compressing files has benefits such as easier uploading and faster data transfer. The process involves selecting the folder, right-clicking on it, and choosing "Add to Archive" in WinRAR. By following the settings on screen, the file size can be significantly reduced. The original file size of 415 MB was compressed to 220MB. WinRAR is recommended as the best compression software for this task.