To compress a folder (or a file), run Windows NT Explorer and locate the file or folder you want to compress. Right-click the object and choose Properties. When the Properties dialog box opens, click the General tab (if necessary). Now, select the check box labeled Compress and then click OK. This opens a dialog box that with the options OK and Cancel. It also contains a check box labeled Also Compress Subfolders. If you want to compress all the subfolders in the folder, along with all the files, select this check box and click OK to continue.

If your newly compressed files fail to appear in an alternate color to show that they're compressed in Windows NT Explorer, choose View, Options and click the View tab when the Options dialog box opens. Select Display Compressed Files and Folders With Alternate Color and click OK.

As to why compression may not be an option--Windows NT Workstation 4.0 will only compress files and folders on an NTFS disk with a cluster size of less than 4K. When the cluster size is larger than 4K, compression is very inefficient and not worth the space savings.