The tar command works really well for a bunch of small files. tar simply adds files to an archive of other files. This tar archive may then be compressed as a single file.
A simple way to tar up all the files in a directory is to go to the directory above what you want to compress (let's say we're compressing the files in directory xyz). Type tar -cvf abc.tar xyz. This will create a file abc.tar which has all the files in subdirectory xyz. To see what files are in a tar archive, you can type tar -tvf abc.tar. When you wish to re-extract the files, the command to use is tar -xvf abc.tar. (It's also possible to extract a single file from the tape archive by typing in on the command line such as tar -xvf abc.tar xyz/thesis.c.)
After you have the tar file created, you can compress it by typing gzip abc.tar. This will create abc.tar.gz. Compressing files in this manner (adding small files to a single large archive and then compressing the large archive) will give substantially better results than compressing the individual files.