If you are talking about actually compressing the text not just shortening then Deflate/gzip (wrapper around gzip), zip work well for smaller files and text. Other algorithms are highly efficient for larger files like bzip2 etc.

Wikipedia has a list of compression times on this page: http://en.wikipedia.org/wiki/Comparison_of_file_archivers (look for comparison of efficiency)

Name  ↓     Text %  ↓   Text time (s)  ↓    Binaries %  ↓   Binaries time (s)  ↓    Raw images %  ↓     Raw images time (s)  ↓
7-zip   19  18.8    27  59.6    50  36.4
bzip2   20  4.7     37  32.8    51  20.0
rar (2.01)  23  30.0    36  275.4   58  52.7
advzip  24  21.1    37  70.6    57  41.6
gzip    25  4.2     39  23.1    60  5.4
zip     25  4.3     39  23.3    60  5.7
lha

If you are talking about actually compressing the text not just shortening then Deflate/gzip (wrapper around gzip), zip work well for smaller files and text. Other algorithms are highly efficient for larger files like bzip2 etc.

Wikipedia has a list of compression times. (look for comparison of efficiency)

Name       | Text         | Binaries      | Raw images
-----------+--------------+---------------+-------------
7-zip      | 19% in 18.8s | 27% in  59.6s | 50% in 36.4s
bzip2      | 20% in  4.7s | 37% in  32.8s | 51% in 20.0s
rar (2.01) | 23% in 30.0s | 36% in 275.4s | 58% in 52.7s
advzip     | 24% in 21.1s | 37% in  70.6s | 57& in 41.6s
gzip       | 25% in  4.2s | 39% in  23.1s | 60% in  5.4s
zip        | 25% in  4.3s | 39% in  23.3s | 60% in  5.7s