No problem for me create, add, delete tar.gz bz2 from RC2
.tar.gz and .tar.bz2 work for me as well.
However, on 3 different computers (4 if you count Virtualbox), using VL7.0-STD-LIVE-RC2.iso (md5sum checked, burned at 8x), when I click Menu > Accessories > Xarchiver >> Create new archive > type "test" and accept defaults > Add > double-click Desktop > OK ... I get an error. A file is added to the archive, but it is a plain text file with the contents of the .desktop files in the folder. When I go down the list of formats, about half of them work.
The same thing happens on my HDD installed version of RC2. Maybe it's the heat wave we're experiencing in Ohio?
OK so here is my test.
For bz2, gz, lzma, xz, lzh, rar, 7z and tar.
I started out by compressing just a single file.
Each worked exept for ....
xz ( which produced a segmentation fault error)
rar (which said "No such process rar)
7z seemed to work, but the compression was corrupted and the file could not be opened afterwards.
and fwiw the best compression came from....lzma. Worst was tar with no compression at all.
Next tried compressing mulitiple file and folders.
bz2, gz, lzma, xz, will not let you select more than one file (perhaps that's all it is designed for. This would also explain why they don't work with folders.)
rar produced the same error (of course), but allowed for the selection of more than one file.
lzh, tar, zip, jar, tar.xz, tar.lzma, tar.gz and tar.bz2 for multiple files or folders...worked.