I have just recently noticed that some folders in Snow Leopard just refuse to be compressed using the “compress [folder name]” command (available under the right-click menu). For the life of me, I could not get the folders to finish compressing, with the symptoms including the famous “5 seconds remaining” progress bar status and the progress bar quickly jumping to about 90% and then just hanging there forever. I once left my Macbook Pro to compress a folder overnight (around 8 hours) and it was just stuck on “5 seconds remaining” status.
Initially I managed to avoid this issue by using utilities based on the 7zip compression, although it is less than ideal, since most of them want you to pay before they let you create archives other than the 7zip format or .7z. After a while I was getting fed up with having to skirt around the issue and decided to investigate and guess what, the culprit is the usual dot files. If you have taken the folder to a Windows machine, say from a USB stick, then brought the folder back to OS X, then you are likely to encounter this issue.
The fix is quite simple. Just bring up the terminal.app (applications > utilities > terminal.app) and type “dot_clean” then drag the errant folder into the terminal window and terminal should display “dot_clean” followed by the path to your folder. Press enter and voila! You should now be able to compress your folder from the option click menu and it will finish. I have not yet encountered this bug in Lion, but who knows, it might be lurking in there somewhere.