Is there any free Windows software which can create compressed archives, and subsequently mount them transparently (with write capability) onto another directory?

So far, the only such program I have seen is ImageX (WIM format), but I'm wondering if there is any other alternative that (hopefully) supports a more well-known archive format (e.g. ZIP, 7z, etc.).

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@Sathya: Doesn't seem to have write support, and doesn't seem to be able to mount to any arbitrary directory. :( – Mehrdad Feb 10 at 8:00
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