A friend of mine from school apparently read something to this effect, then misinterpreted it as "If I XOR a Zipped file, it will be unbreakable!" However, this is easily proven false.

For you see, Zip files (and most files, for that matter) have headers. The Windows XP "Compressed Folders" zip file has 10 characters that are always the same. So, by XORing the first 10 bytes of his "encrypted" Zip file with the 10 known bytes, I instantly got the password he used to "encrypt" the file.

Even if you write your own compression algorithm, I must warn you- your algorithm will likely have a section mapping out the redundant parts of the text. This may be the weak point. When you encrypt your compressed file, make sure to use an algorithm that isn't subject to a known plaintext attack.