AVI is a container who's contents (audio and video streams) are already compressed. If you alter the quality of an avi file you would be recoding the video with a codec (x-vid) at a lower bitrate. This isn't compression, it's just sacrificing quality for filesize.....it's a tradeoff. Changing the file extension doesn't help, many programs look at the file header which would not be changed.
It would be possible for an ISO 'compression' program to search the contents of an ISO for duplicate files. When they are found it could delete one of them and replace it with a 'marker' that points to the other identical file. Problem is that this would not longer conform to the ISO image standards, the resulting ISO would need to be rebuilt by the same program at the other end after it was sent to a recipient.
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