WinRAR is able to create archives in two different formats: RAR and ZIP. Here is a comparison of these formats:
The main advantage of ZIP format is its popularity. For example, most archives on Internet are ZIP archives. So if you are going to send an archive to somebody, but you are not sure that your addressee has WinRAR to extract the contents of the archive, it might be a good idea to use the ZIP format. On the other hand, you may send a self-extracting archive. Such archives are slightly larger, but can be extracted without external programs.
Another ZIP advantage is speed. ZIP archives are usually created faster than RAR.
In most cases RAR format provides significantly better compression than ZIP, especially in the solid mode. Another important RAR feature is support of multi-volume archives. They are more convenient and easier to use than so called ZIP "span disks" archives. WinRAR does not support ZIP disks spanning. If you need to create a multi-volume set, use RAR volumes instead.
RAR format has also a few important features missing in ZIP, such as the recovery record allowing to reconstruct damaged data and locking of important archives to prevent their accidental modification.
RAR format is able to handle files of practically unlimited size (up to 8,589,934,591 GB), when the maximum size of a single file in a ZIP archive is 2 GB. Note that older file systems do not support files larger than 4 GB and you will need to use NTFS to work with such files.