There are two different types of "compression":
The original data is preserved 100%.
This is the sort of compression used by e.g. Zip, RAR, and the DAA format.
The original data is changed in a way that hopefully is as close to the quality of the original material as possible. This is only meaningful for compressing pictures, audio and video, and it cannot be used on other data.
This is the sort of compression that is used in MP3 and WMA music files, DVD Video (e.g. MPEG2 for Video and AC3 for Audio), JPEG photos etc.
As a general rule, once you have compressed something you will not be able to compress it (much) further with a lossless compression technique, so it doesn't make any sense trying to store your DVD Video as a DAA image instead of an ISO image.
It's possible to further compress something that has been compressed by lossy compression, by using further lossy compression however, but that will eventually lead to visible or audible loss of quality.