The Unarchiver is a much more capable replacement for “Archive Utility.app”, the built-in archive extraction program on Mac OS X. The Unarchiver is designed to handle many more formats than Archive Utility, and to better fit in with the design of the Finder. It can also handle filenames in foreign character sets, created with non-English versions of other operating systems.
It is very simple to use and install – simply copy it into your Applications folder, or whereever else you might prefer, and then set it as the default program for archive files. This can be done either from the preferences panel in the program itself, or in the Finder. Supported file formats include Zip, Tar-GZip, Tar-BZip2, RAR, 7-zip, LhA, StuffIt and many other old and obscure formats.
The blurb above was taken directly from the Unarchiver website, but I can personally say that the Unarchiver is installed on every one of my Macs. I have never found its equal and I recommend you install it on your machines.