Compression is the process of reducing the size of a file or data set while preserving its original content. In the context of PS2 ISOs, compression can be achieved through various algorithms, such as ZIP, 7-Zip, or proprietary formats like PFS (PS2 File System).
When you see a PS2 game labeled as "Highly Compressed" (often ending in .cso , .jsl , or just a smaller .iso ), it usually falls into one of two categories: highly compressed ps2 iso