bzip2 / bzip
bzip2 is a compression program.
The bzip2 kioslave is not directly usable, and is intended for use as a filter. For example, the tar kioslave can filter a file through the bzip2 kioslave, in order to display the contents of a tar.bz2 file directly in a window.
If you click on a file compressed with a .bz2 in , this kioslave is used to uncompress it and display it as a normal (uncompressed) file.
If you are a developer, and would like to use the bzip2 filter, you can find documentation on using kioslaves at http://techbase.kde.org
See the manual: bzip2.
bzip is the ancestor of bzip2. It is rarely used today, having been replaced with bzip2, which offers much better compression.